Distributed Ledger: More consumers want to use cryptocurrencies for purchases, but merchants are hesitant to accept them

Crypto in a snap

Bitcoin
BTCUSD,
+0.04%
has gained 3.6% over the past seven days, recently trading at around $41,596, according to CoinDesk data. Ether
ETHUSD,
-0.91%
was up 1.8% over the seven-day stretch to around $3,066. Meme token Dogecoin
DOGEUSD,
-1.60%
logged a 1.2% loss while another dog-themed token, Shiba Inu
SHIBUSD,
-0.48,
traded 2.1% lower from seven days ago.

Crypto Metrics

Accepting crypto as payment?

Consumer demand for using cryptocurrencies for purchases has been growing, but for most merchants to accept them as a form of payment remains a headache. 

About 34% of consumers are interested in using cryptocurrencies to buy items online, according to a recent study by online shopping platform Smarty. Meanwhile, Insider Intelligence estimated that 3.6 million US adults will use crypto to make a purchase this year, up 68.6% from last year, a report released Wednesday shows.

In contrast, only 4% of merchants are accepting crypto as a method of payment, according to a study by Crypto.com released in February.

For most merchants, accepting crypto means a variety of risks, according to Shane Rodgers, co-founder and chief executive at PDX Advisors, which backs cryptocurrency PDX Coin. Crypto prices are volatile while crypto exchanges remain largely unregulated. Merchants also have to bear custody risks, Rodgers noted.

Some companies, such as electric car maker Tesla
TSLA,
+2.43%,
hold bitcoin on its balance sheet, but most merchants and vendors “are traditionally low margin businesses.” “They can’t afford to take that risk,” Rodgers told Distributed Ledger in an interview. 

As a result, merchants that enable crypto payment usually partner with third-party services that allow them to convert crypto to fiat currencies, Rodgers noted.

Coinbase’s NFT marketplace 

Coinbase
COIN,
-7.38%
launched a beta version of its social non-fungible token marketplace on Wednesday, six months after it first announced the plan in October.

Beta testers, who are invited based on their positions on the waitlist, will be able to create profiles to buy and sell NFTs using any self-custody wallet, according to the company’s blog post. Users can also like, comment on and browse other NFTs on the platform, with functions similar to Instagram.

Coinbase made the push as part of its efforts to diversify its businesses and boost revenue, as crypto trading volume remains sluggish overall. The company’s shares are trading at around $137.80 Thursday afternoon, heading to its lowest close in history.

Read: NFT frenzy seems to be cooling off. Here’s why some investors remain bullish

Crypto companies, funds

Michael Saylor’s MicroStrategy Inc.
MSTR,
-4.59%
lost 1.57% on Thursday to $442.01, while it was down 2% over the past five days.

Mining company Riot Blockchain Inc.
RIOT,
-6.67%
shares dropped 4.5% to $13.32, and it was down 11% over the past five days. Shares of Marathon Digital Holdings Inc.
MARA,
-6.42%
were down 3.3% to $20.03, with a 5.7% loss over the past five days. Another miner, Ebang International Holdings Inc.
EBON,
-7.73%,
traded 3.8% lower to $1.02, with a 2.9% loss over the past five days.

Overstock.com Inc.
OSTK,
-5.58%’s
shares were down 3% to $36.14. The shares have declined 5.9% over the five-session period.

Shares of Block Inc.
SQ,
-6.81%,
formally known as Square, fell 4% to $109.96, with a 9.2% loss for the week. Tesla Inc.
TSLA,
+2.43%’s
shares went up 6% to $1035.87 while its shares gained 5.1% for the past five sessions.

PayPal Holdings Inc.
PYPL,
-6.07%
lost 5% to $90.12, while it was down 11.8% over the five-session stretch. Nvidia Corp.
NVDA,
-5.59%
lost 4.5% to $205.13, while was looking at a 3.5% loss over the past five trading days.

Advanced Micro Devices Inc.
AMD,
-4.29%
lost 3.1% to $91.10 on Thursday, while it lost 2.2% from five trading days ago.

Among crypto funds, ProShares Bitcoin Strategy ETF
BITO,
+0.47%
gained 0.8% to $25.95 Thursday, while Valkyrie Bitcoin Strategy ETF
BTF,
+0.44%
rose 0.6% to $16. VanEck Bitcoin Strategy ETF
XBTF,
+0.68%
gained 1.6% to $41.02.

Grayscale Bitcoin Trust
GBTC,
-1.26%
traded up 0.6% to $30.25.

Must Reads