Topic: Will spending Bitcoin actually be bad for the price? (Read 661 times)

People should look into something like this. And a lot of people here i see really support bitcoin and give positive thing that come if bitcoin spent on something. I think if bitcoin can be spent to buy something, it will adopted in a lot of country and demand will increased.

Spending bitcoin is actually not bad for the price. The more bitcoin is used as a currency, more its demand will increase. More People will use it and since its supply is limited, the price will grow automatically.

Consider no one spending bitcoins and miners waiting for the transactions forever, no trading etc will means no use case for bitcoin and it value will be decreased to zero.

We should be thankful that there is an increase of Bitcoin users than of decreasing. The moment that there is a huge market adoption, the more market prices moves is that we've actually looking for (price fluctuations).
If we could compared what will happen when everyone keep on holding versus everyone will spending, the market demand will chance its course. We could see more favorable market flows when everyone will keep on spending. 

Also as more and more stores accept Bitcoin, I (and many others) will increase the amount of Bitcoin I buy every week, I would like to get to the point where 50% of my paycheck goes into Bitcoin, but in order for that to happen, I must be able to pay my bills and purchases with Bitcon.

But as more people put more of their income into Bitcoin, it will increase the price.

There's people who don't have the time to wait indefinitely for the price to go up and spending their Bitcoin could save them some time or effort now that exchanges and other services are accepting Bitcoin. They could profit during this time but we shouldn't stop them from spending Bitcoin if they really want to since that's the main purpose of it.

Spending bitcoin is not advisable for this time of the cycle. If you have more money to spend, use your cash to buy some some BTC. The price is noticeably going upward and its not smart if you wouldnt take the opportunity and spend yout remaining bitcoin for a non necessity things exchanging your future millions.

I think merchants will convert some of the amounts of the coins into fiat because if fiat is still available as the payment method, they need to get the money for their profit and save the rest of coin as their investment. I think people will do the same as with bitcoin, they can make money, and at the same time, they can have a new investment so they will save more and more bitcoin for the future.

Obviously, Your thoughts are right at the same time peoples are weighting for Bitcoin legal in China and India. Because 220 million peoples are live in these two countries so once accepted automatically it will going to moon. Online shopping and stores are impossible to gain expecting hype. I think as soon as possible Bitcoin will occupy entire world but it takes some time. So current investment is good for future days 

Widely used means more demand, so the price can easily go up when the supply is limited but the price will still depend on the trend. Bitcoin should be used for transactions online, that’s alright and it can’t affect much the price. Yes, if we can easily use bitcoin for payment and more online store accept bitcoin then more users will use their bitcoin, its more faster and convenient way of shopping.

Spending your bitcoin will only generate liquidity since more bitcoin will be available to be bought and sold, however you are only looking at the supply side of the equation and while it is true that if people begin to spend their bitcoin there will be more bitcoin in the market the scenario you bring will also have a larger demand, so I still think this will make the price of bitcoin to skyrocket since most whales will never do something like that and when you take into account the lost coins as well then to me it seems the demand will outgrow the supply and that always means higher prices.

No coins are being sold on exchanges. Payment processors like Bitpay sell everything OTC. I think maybe you're not accounting for the huge demand that exists to purchase these coins.


Spending always represents selling pressure because it means spenders want to liquidate coins. So to an extent, you are right. Spenders are keeping the OTC market from completely drying up in supply, which prevents some excess demand from entering exchanges.

I don't think this is a big deal though. Fewer and fewer people are going to want to spend their BTC as time goes on and the price keeps rising. A lot of these coins being spent today are being scooped up by long term investors.

I think some years from now, merchants won't be converting all the coins they receive to fiat either.

I think some people don't understand what I said in my initial post.

I'm not saying a single transaction of buying something will affect the price. I'm not saying spending bitcoin is a bad thing to do. I'm not saying bitcoin circulating through spending is bad, or the various other things that people brought up.

I'm saying once you can easily spend bitcoin, people will start spending it, instead of just holding it, because they can finally use it easily in real life. And spending bitcoin won't just be moving bitcoin to another person no bitcoin is sold. Merchants won't accept bitcoin directly for the most part, I think that reality is becoming clear. Which means every time you spend your bitcoin it is getting immediately sold on exchanges, and the resulting fiat is sent to the merchant you spent the bitcoin at. The effect is that every time you spend bitcoin what you are really doing is selling bitcoin for fiat. If spending becomes regular this provides a huge selling pressure in the markets, meaning price goes down. Market downward pressure would no longer be just from people taking profits from trading, but add in every single time bitcoin is used to purchase something, that gets added to the selling. Now of course if the ability to readily spend bitcoin causes bitcoin to be adopted by way more people, it will even out or something. But, if market dynamics continue as normal - people buying bitcoin when the price goes up - and people don't just start buying bitcoin because they can spend it (ya know since they can already spend money now, you don't need bitcoin to buy stuff) then spending it will just mean that people who already have bitcoin can now use it, which means they will be regularly selling it, rather than holding it as a store of value. This is downward selling pressure on the market.

So I think a very real possibility is that spending causes more downward pressure on the bitcoin price, without an equal amount of additional adoption being caused by being able to spend bitcoin, because the major reason for converting fiat into bitcoin in the first place will likely remain the same, because the price will go up in the long term. But the downward pressure of selling could slow that adoption by, well, obviously causing the price to drop due to the pressure.

Just a possible outcome. It could very well be that once widespread merchant adoption hits all the people who think bitcoin is a scam will realize its real and will start buying it due to it being possible to spend, which would certainly offset the existing bitcoin holders suddenly starting to spend (sell) their bitcoin on a regular basis.

Bitcoin the value of USD is at a set price. It fluctuates with other national currencies but not within the US itself. It is only changes based on the amount of USD issued by the Fed. USD doesn't have a market that affects its value within the country. And it doesn't get sold for something else when you buy something. It isn't even close to the same thing.

I already explained my reasoning behind why it could be bad for price. Did you read my initial post? Or did you only read the thread title?

Spending it to a merchant is basically trading your crypto into Fiat so it would affect the price but the crypto market is huge so a single transaction would see an effect on it.
Even in a trading site we could see that there are plenty of traders doing it daily but it still continues to grow because of the demand is huge.
So even if we use it to pay in a merchant the price could still hold it unless we are also experiencing a market crash.
And even if Bitcoin gets accepted by merchants only a small percent of crypto user would pay with it since they would rather hold it to gain profit since most of us see's it as an investment not as a payment option.

I don’t really think spending bitcoin will totally crash the price of bitcoin based on your explanation, because if you look at the principle guiding or affecting the value of bitcoin which is basically law of demand and supply, it is when demand becomes high and supply becomes limited that bitcoin value becomes very expensive.

So if all retail stores all accept bitcoin, it means they will force their users to buy bitcoin which will create enough demand, and the more people demand bitcoin, even if those retailers are changing what they receive to dollar, the lesser we will have supply, and since bitcoin supply has a limit, bitcoin will gradually gain its value even when they convert it to fiat.

That's very true. If everyone hoards BTC and nobody spends it, there will be zero transaction liquidity on the network. The network would be useless. Fees wouldn't support mining security anymore. BTC would be worthless in that case.

People converting BTC to fiat (by spending or selling) is much better than a reality where nobody spends at all. I believe this phase where Flexa and others are converting BTC to fiat for merchants is just a middle stage prior to mainstream and merchant B2B adoption. Eventually, less and less BTC will be converted this way and the middlemen will start being cut out.

Spending and buying is good for the economy. If you buy something and you pay BTC, it wouldn't do anything to the price since the price is only dictated by the market which is why it doesn't matter if you cash out to your fiat as its not where they market price will be base on. fact is that BTC is being cashout everyday by thousands of us.

Well, I believe you're mixing 2 things here:

Spending is, and will remain limited and is actually needed because without it, none would sell and if nobody sells, how will people who are willing to buy it, would actually be able to purchase it at their purchase price?

Ah yeah, things you're mixing here are trading for money and trading for Bitcoins.

How?

Trading for money has many different phases, where few of them are mentioned below:

- One is the phase where the app you described helps people to trade their Bitcoins to pay to merchants and merchants receive fiat (or a state issued centralized cryptocurrency). Another one is when you pay Bitcoins which they display based on market price (fluctuating values in BTC) and they receive the coins only instead of fiat, but it's still trading considering that you're getting back the good/s and/or service/s against your payment.


Whilst trading for Bitcoin is something different:

- When you buy/sell BTC online and pay/get fiat, it is a bit different if compared to trading for money.

- It is a considerable fact that you get to see a lot of fluctuations in the price and that's because trading for money (as mentioned in type 1) is lesser if compared in numbers against trading for Bitcoins because people love to make more Bitcoins through trading over exchanges (be it for altcoins or through fiat) and another type is margin (leveraged) trading. Trust me, price of Bitcoins is being set by those big traders who are setting the trends and its adoption will also bring some greed in people to hodl their BTC and earn more fiat while its value grows.

For Bitcoin to survive it needs to be spent. Even if that spent bitcoin eventually gets converted into fiat by the store where the transaction took place.

This is why the guy who spent 10,000 BTC for 2 Pizza's was an important event. Sure it was a bad investment in hindsight but it was one of the transactions that made it possible to actually see bitcoin being used as a currency.

Some people don't realise that if you keep your bitcoins forever and never actually spend them, then its not good for the crypto ecosystem. You need to spend them so stores can make a profit, so exchanges can make money in fees and so miners can make money in fees also.

No, basically when a bitcoin is spent or exchanged for money FIAT is because another person or another operator is changing it, that application may have an Exchange or maybe it comes to a Wallet whose owner is an investor or the person who wants to buy , for example: In the platform of Localbitcoins.com, bitcoins are bought and sold for FIAT money, this means that the bitcoin passes from one client to another, and is exchanged for money, the application may have that way of operating, although It would be good to know how is the mechanism that they choose to make the Exchanges.

Logically the constant movement of all bitcoins spending on goods and services will cause the economy of Bitcoin is dynamite and produce a great development, this ensures that the general economy of bitcoin and the market increases because people start to see the bitcoin of another way and start looking for it much more, that is if the demand increases the price of bitcoin starts to rise, which would bring as a direct consequence is that the bitcoin increases in price rapidly increasing way.