Australians Hesitant to Use Bitcoin as Currency
A recent report by The Conversation explored the various online payment options used by Australians. They reviewed data collected by the Reserve Bank of Australia, which surveyed 1,000 adults about how they pay for things online.
Reserve Bank inquired about various options, including e-wallets, third-party payment processors, and crypto. The data looked at which options customers have heard about and which they actually use.
Of the customers surveyed, around 95% had heard of PayPal and Buy Now, Pay Later. A close third at approximately 65%, was cryptocurrency. PayID was fourth, with direct QR codes fifth. Beem and AliPay were dead last, tied at about 15%.
However, the critical data was the services that customers used. PayPal was the easy winner, with about 65% using the service for purchases. Buy Now, Pay Later and Pay ID were tied for second at around 35%
Of those surveyed, only about 2% use it for purchases. Only Alipay had a lower usage rate. This rate of usage seems common, as other studies confirm the same. The United States Federal Reserve reports that only 2% of US adults used crypto for purchases. Sweden’s Riksbank reports only about 1% of Swedish adults use crypto as currency.
Price Volatility Influences Usage
One primary reason adults do not use crypto for online payments is price volatility. Unlike traditional fiat currency, the price of Bitcoin and other crypto assets constantly changes drastically. It is common to see crypto drop or rise by 5 to 10% in a single day. Other more volatile cryptocurrencies have been known to fluctuate more wildly.
Stablecoins are supposed to help create a bridge between consumers and cryptocurrency, but they are not always successful. Multiple stablecoins like Libra and Terra have failed, and even established coins like USDT can have the occasional flash crash.
The price volatility of crypto is a reason you don’t see business list their goods and services in terms of crypto. Businesses that accept crypto often wait until the point of sale before telling a customer how much Bitcoin to send. This helps to reduce the likelihood of being caught in a sudden flash crash.
Is Crypto an Investment or Outright Gambling?
Another reason crypto is not used for purchases is that it is perceived as an investment rather than an actual currency. Bitcoin and other cryptocurrencies are traded similarly like stocks and other assets that gain or depreciate in value. Bitcoin is often considered a hedge against inflation, and some people predict that Bitcoin could reach astronomical heights in the future. Why spend $100 in Bitcoin when it could be worth $1,000 or more in the future?
Then there are those that view crypto as a form of gambling. Many argue that crypto is an unbacked security with no real value other than what someone is willing to pay for it. This would put it more in the gambling category rather than an investment.
Some only use crypto for purposes of gambling. Australian online casinos are one of the primary places you can deposit and play with Bitcoin or other crypto. Some people only get crypto to use at gambling sites and don’t see the value in holding it as an investment.
Bitcoin’s halving event is around the corner. Generally, when this happens, the price of Bitcoin and other crypto assets go on a bull run. The next 12 to 18 months could prove profitable for those who decide to hold. Then again, if the naysayers are right, HODLers may have wished they had spent their Bitcoin on something practical.