Commodity Blog

Commodity news, technical and fundamental analysis, market data on precious metals, energies, industrial metals, and soft commodities

Archives

Retail and Consumer Giants’ Plans to Adopt Bitcoin Could Spark Rally in 2014

January 23, 2014 at 20:42 by BitcoinNews

A new class of retail and payments industry heavyweights appears poised to adopt bitcoin, which might have contributed some fundamental underpinning to bitcoin prices in the wake of the twin $1100+ peaks in the week following the Thanksgiving holiday last year. Prices have continued to hold up since recovering the $800 level in the first week of the new year, though recent rallies have had a series of lower high as volatility and volumes have decreased following the explosive rally in the first week of 2014.

Also note in the chart below a potentially bullish technical analysis pattern, as the dampening of price swings has coiled tightly in the apex of a classic wedge pattern created from the repeated support at the $800 level.

wedgechart

The new names cropping up in the bitcoin forum rumor mills include Google Wallet, a major payments competing with Paypal, eBay itself along with its longtime holdout Paypal, which may at the very least loosen up on bitcoin-related listings, and even major telecom T-Mobile, which may have become a disruptive force lately and may even rival the top two providers if the Sprint merger goes through.

According to Carl Oberg, Chief Operating Officer of FEE, a Libertarian interest organization which published “The Freeman”:

 “Bitcoin and other alternative currencies are important ways for individuals to live freer lives and to ‘leave Leviathan,’ as a popular article from The Freeman puts it.  While FEE does not give investment advice, now with the option to pay vendors in Bitcoin, we can introduce even more people to this innovative and exciting market.”

However, it’s not simply Libertarian-focused companies who are so outspoken in their enthusiasm for bitcoin. When CNBC/Marketwatch blog “The Tell”  reported last month that Overstock.com, a retailer with $1 billion in revenue annually, would accept bitcoin, CEO Patrick Byrne was also quite frank about his reasons for liking bitcoin:

 “I’ve come to understand bitcoin better and decided it’s something we do want to be associated with,” said Byrne, who added that he does not hold bitcoin. “It would just be another payment option, but beyond that I don’t know the technical details of how we would store it and such.” He further added that, “Money is too important to leave in the hands of government officials,” and that “the long-run value of all fiat currencies goes to zero.”

So the reasoning for taking on bitcoin could extend beyond a simple business calculation due to the growing popularity and consumer demand to transact in bitcoin, at least for Byrne. Whatever the reasons, increased demand to transact in the digital currency would could exert great pressure on prices due to the limited supply of bitcoin, so another 10 fold increase in price is not out of the question should this potentially much greater level of adoption be reached in the following two to three years.

That is to say, if not only these giants adopt bitcoin, but it also proves to be a very popular with their customers, as the first day with Overstock.com indicated might be a possibility.

However, even without major players adopting it, if enough of their smaller rivals take it on, the effect may be the same regardless. In fact, Coindesk reported today on bitcoin’s adoption by yet another of these more nimble competitors, in Tiger Direct, a popular electronics e-tailer.

The last wildcard of this handful, T-Mobile, is based on a leaked email reported on Coinspectator, though the other too have more or less infused much of the optimism typical of bitcoin aficionados into the rumors in the email exchanges which have surfaced about them as well. In fact, T-Mobile CEO John Legere’s curt reply to the rumor on Twitter was simply: “Under review!”

Nonetheless, if even one from this new handful of potential bitcoin adopters in the big leagues of business comes through, it could lead to an even more dizzying pace of adoption in 2014 than that of last year.  In the first day of acceptance, Overstock tallied up US $126K worth of bitcoin-denominated sales, according to Wired, providing a case study for other large retailers.

Predictably, more CEOs and other executives of companies are planning to accept bitcoin, following the theft of 40 million credit card accounts from Target Stores and Overstock.com’s lead. Furthermore, bitcoin’s potential price gains from such mainstream adoption would likely be far more sustainable, due to its proven stickiness among actual bitcoin users, than the Chinese speculation-fueled rally of last year.

Leave a Reply

required
required  

Navigation

Menu