Most retailers use a payment processor like Bitpay or Coinbase. Because of this, the retailer doesn't even see the coin, it goes straight to the processor who then gives the retailer the fiat equivelant. When you buy at Newegg or Overstock, you're actually giving your bitcoin to Coinbase or Bitpay, who I wager are NOT dumping that coin, because they need as much as possible on hand to sell to others. They probably sell enough to keep some baseline ratio for their fiat/btc stores, but it does NOT mean that massive amounts of coin are being dumped because retailers accept bitcoin.
Actually, the recent drop in BTC probably has more to do with the surging dollar than anything...
Actually, the recent drop in BTC probably has more to do with the surging dollar than anything...
Whether they are "dumping" the coins or not is irrelevant. Either way they must still sell all the coins in order to pay fiat for the merchants, and this selling creates downward pressure on the price.
I can see through my trading activities that user adoption has been very slow this year (maybe 10% - 20% of last year). It is clear to me that the combination of increasing merchant sales and slow user adoption is driving the price down.
I don't believe the rising dollar is a significant factor. The dollar has risen 10% against other currencies since May, but Bitcoin has fallen more than 40%. If the fall is due to the surging dollar, then you would expect the price of Bitcoin to be rising in other currencies, but it isn't.
