There’s a perfectly good reason why the markets didn’t “take off” this week when Microsoft revealed that it would begin allowing customers to fund their accounts using bitcoin. The massive tech giant’s integration is sure to bring new and substantial selling pressure to the digital currency.
Seasoned bitcoin traders treated the news like a frozen Windows machine displaying a giant blue screen of death. In the moments following the announcement, traders went into buying mode, but it didn’t take long for the experienced speculators to understand the enormous auto-selling that the integration would bring.
Microsoft has no intention of speculating on bitcoin’s long-term value. Instead, they will be using Bitpay to systematically exchange their bitcoin revenue for US Dollars. This means an increasing number of bitcoins will be dumped onto the markets in the coming weeks, creating a downward selling pressure spiral.
And Microsoft’s new bitcoin customers are unlikely to turn around and buy more bitcoins to replace those spent on digital purchases. After all, it make no sense to run out and buy more bitcoins to facilitate purchases that can be made with traditional fiat. There is little reason to take the additional, and often awkward step, other than perhaps for novelty or speculation.
What the community must realize is that for every Microsoft adding bitcoin as a payment option, they need an Exxon or a General Electric announcing that their employees will now have the option of receiving wages in bitcoin. Better yet, anytime a company adds bitcoin as a payment option, why not offer employees the same option for compensation. This would allow the company to funnel some of their new bitcoin revenue back into payroll, rather than auto selling for US Dollars.
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We need more focus now on the wage side of integration. Otherwise, this current one-way trend will become impracticable and unsustainable. And it won’t be long before these types of major announcements become a reason to short the market, rather than a reason to celebrate.
Full Story: http://altcoinpress.com/2014/12/why-the-bitcoin-markets-didnt-rally-on-the-microsoft-news/