Topic: Is Overstock.com slowly draining the price? (Read 2030 times)

That makes no sense, and common sense suggests the opposite. Which is more valuable, a crypto-currency that you can spend on Amazon or an otherwise identical crypto-currency that you can't spend on Amazon? The only thing that will make Bitcoins valuable for something other than speculation is value as a means of exchange.

Where do you get the figure $1 Million per day? I thought it was more like $1 million per month.

You can't argue against adoption, at any point. Adoption is the only thing that is going to turn bitcoin from a speculation bubble into something that actually has a fundamental value. It's just a weird and unintuitive journey to get from one point to the other. Coins SHOULD be getting spent and not hoarded. Let the hodlers dump their coins into merchants - it's a healthy decline that has to reverse eventually as long as adoption continues, and then it will be much stronger.

Paying on Overstock with bitcoin means that you don't have to enter personal credit card information which can get stolen. That is not an insignificant thing, when you consider things like the recent theft of credit card data from Target, or the catastrophic Heartbleed bug.

It can also grab the attention of potential newcomers. A lot more people will take btc seriously if they see the retailers start accepting btc payments.

And after you spend them into Patrick Byrnes wallet, what do you do?  You buy more.  Now fewer coins are on the market than before you spent them.  Byrne is holder.

Because bitcoin is currently a medium of speculation, not a medium of exchange, the big retailers' participation in the whole bitcoin craze is not healthy at this point in time. Basically, bitcoin is NOT ready to be used in this manner. If and when major retailers like Amazon start taking bitcoins, it will crash the price. It's better that these retailers stay the f**k away from bitcoins, so it can go To Da Moon.

Nonsense. That you can use Bitcoins to buy stuff on Overstock or Tiger Direct makes them more valuable than they would be otherwise. While people won't buy Bitcoins just to use on Overstock or Tiger Direct, people who buy Bitcoins for other reasons (such as speculation) will be more interested in holding them the easier they are to spend.

Consider someone who could accept a part of their salary in Bitcoins and who is marginally interested in holding them over the medium to long term as a possible investment. One barrier to holding them is the difficulty in selling them when they might wish to do so. Knowing they can use them to buy stuff increases their desire to have and hold Bitcoins. Otherwise, the demand they would create would not exist.

If I remember rightly it was about $200K in the first week and the $1 million figure was in total after a few weeks. I assume that's slowed to a crawl now so the effect on the day to day price is a drop in the ocean.

I think they are causing the price to go down...  think about it.  Nobody is buying bitcoin (which would cause the price to  go up) just to buy something on Overstock or Tiger Direct. 

People who already have bitcoins are using them to buy stuff.  Overstock and Tiger Direct then immediately sell those bitcons on the various exchanges.  Thus, the more popular it becomes to spend bitcons on Overstock and Tiger Direct, the more already-owned bitcons are going to be basically converted to fiat currency. 

When you buy something on Overstock or Tiger Direct, you are indirectly converting your bitcons into fiat currency.  That's not a problem when we're talking about smaller merchants, but when it's a larger online retailer like Overstock.com, it results basically in a huge increase in sell orders without a corresponding buy order (because these are already-owned coins).  More sell orders than buy orders = lower price.

I'm not suggesting we should stop buying things with bitcoins... I shop on overstock.com all the time and sometimes just to support their efforts in accepting bitcons.  Buying things with bitcoins will be beneficial for bitcoin in the longterm, but I think it does somewhat account for the recent price drop we've been seeing. 



 

At the moment its only useful for early adopters. No one in their right mind will convert fiat to an exchange buy bitcoin then buy something off overstock after loosing all the fees and probably lost on the price fluctuation.

But yes more merchant adoption on the long run provides more value for bitcoin as a payment protocol.

I'd assume a good flow of money gives stability in price. We are seeing a stable price so maybe it's a good thing. Hope we go to da moon again

I'm not sure whether or not overstock.com sales might drain the price on the short term (although I'm inclined to believe they're just too small for this), but the important thing is: Overstock.com makes Bitcoin more useful, and therefore more attractive for people to possess. The more companies follow overstock to accept BTC, the better for Bitcoin on the mid- to long term.

it seems you're missing the point a little bit so i'll attempt to clarify.

even if Overstock sales come from "old coins" and therefore are associated with large bitcoin-days-destroyed, as long as there is nonzero demand this can be a good thing for bitcoin by increasing liquidity. for instance, the fact that litecoin has a larger trading volume than bitcoin is one reason i've begun to take it seriously. most bitcoins must be traded off-exchange or not traded at all, and this kind of hoarding does many things, including hurting the general liquidity of bitcoin at the exchange. anything that gets these old coins available for sale is a good thing, as the small demand that is necessary to keep this "exchange inflation" from driving down the price results in a more equitable bitcoin distribution. this process also stress-tests the ticker price against the actually present demand (bitcoin hoarding results in hyperdeflationary events that distort the ticker price).

in other words, it's not the same people who are continuously buying BTC to use at Overstock, but because the demand is present to soak up the "Overstock-inflation", it is still a closed loop that shouldn't affect the ticker price negatively, and generally contributes positively to the health of the bitcoin economy.

I'm curious what makes you think this is happening?  It doesn't really make sense for the lay person to buy goods on Overstock.com in this manner.   Why bother converting your dollars to bitcoin, then buy them back once you've spent them? That item will now have cost more after the bitcoin exchange fees.  It's just a more expensive hassle that most people don't want to fool with.

I think the majority, if not all, sales at Overstock are from the early adopters who acquired a lot of coins.

100% typo by the writer of article.
considering their CEO said that they expect bitcoin sales to reach $10 million or $15 this year." http://online.wsj.com/news/articles/SB10001424052702304815004579418962232488216

I got the $1 million per day from here:
http://www.fool.com/investing/general/2014/03/22/will-bitcoin-destroy-big-government.aspx

"Indeed, while Overstock.com may accept bitcoin, it doesn't store them -- all the bitcoins Overstock.com takes in (now worth more than $1 million per day) are converted directly to U.S. dollars."

Though from http://online.wsj.com/news/articles/SB10001424052702304815004579418962232488216 I see:
"The company will keep 10% of its revenue from bitcoin sales in the virtual currency, with the intent of eventually offering it as payment for vendors and employees. Mr. Byrne said the company now holds bitcoins worth "tens of thousands" of dollars."

This is encouraging.

Motley Fool does tend to attack Bitcoin every chance they get so they are likely misquoting the figure with no care for correcting it. They do have a bunch of worthless stocks to hock.

Overstock has $1B+ yearly revenue so if this would be true then Bitcoin share of their revenues would be around 30% which is totaly absurd. If it would be true, Bitcoin to the mooooon.  

Could you provide source where they claim selling about $1 million worth of goods in bitcoin per day?
All I could find is they sell about $20-30K every day and that they "only" had a bit more than $1M in bitcoin transactions in two months.

http://techcrunch.com/2014/03/04/overstock-com-exceeds-1m-in-bitcoin-transactions-in-two-months/
http://www.geekwire.com/2014/overstock-ceo-20-30k-bitcoin-sales-every-day/

The way I see it, the ecosystem cycles through buying Bitcoin to be spent at Overstock, and Overstock selling it back to someone else, and then someone buying or using Bitcoin to spend it back on the site again. Overstock's circulation is very good for Bitcoin, and I highly doubt its hurting it. Its causing more buys than hurtful sell pressure.

Like others said, it is certainly speculative by the looks of what is currently draining the price.

Those spending bitcoins (large sums) are mostly long-term holders. They will not buy back bitcoins now, but will wait for the real bottom.
This is bearish, as I already said in January. But once the price will drop further, overstock sales paid with bitcoins will slow down.