Australian Cryptocurrency Expenditure at Retail Businesses - December 2019

Hayden Otto

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Australian Cryptocurrency Expenditure at Retail Businesses December 2019
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Bitcoin Cash dominance

Bitcoin Cash is by far the most popular cryptocurrency with merchants in Australia with more merchants choosing to accept the Bitcoin Cash cryptocurrency in preference to any other crypto or combination of cryptos. While cryptocurrency spending in Australia continues to expand, so too has the dominance of Bitcoin Cash now claiming 96% of all physical merchant spending in the nation.

The importance of physical merchant expenditure

Merchants that choose to accept cryptocurrency as a payment option do so because the business case makes sense, however not all cryptocurrencies are created equal. Surprisingly, some cryptocurrencies are not designed to operate as electronic cash or have serious deficiencies when operating in the role, and others are technically not even cryptocurrencies.

Physical merchants are always seeking new ways to achieve differentiation, to make money and ultimately grow their businesses. Many have heard about cryptocurrencies and are testing the waters with adoption. The most successful merchants are those that have created a powerful payment experience which has customers and onlookers excited. A good payment experience will generate new customers and have customers returning.

In order to field a powerful payment experience, the individual properties of a coin come into play more so than for online merchants. Recording physical merchant spending is our best coal-face indicator of a coin’s relative utility and is potentially an important leading indicator for investors to consider. If your coin’s merchants are not attracting new customers or if your coin’s physical merchant base is not growing, it can hardly be considered long-term credible.

Sourcing Data and Data Policy

The data is sourced from the payment processors operating in Australia. Only Australian physical merchant spending is considered and includes doctors, lawyers, accountants, engineers and other professionals that can demonstrate a physical presence and that have elected to support a cryptocurrency as a payment option.

Not considered are online merchants, online cryptocurrency payment gateways, or merchants that are not trading over-the-counter.

We are confident that our reporting captures the vast majority of Australian retail cryptocurrency expenditure. However if members of the community believe they have significant retail data that is not currently included in our reports, they have always been encouraged to contact us and provide data for inclusion in future reports. To this date there has been no such submission of additional data from the community.

Examining cryptocurrency usage

Australia’s cryptocurrency economy grew 10.9% across the nation in December, recording a total spend of $62,174.12 up from $55,725.05 over the previous month.

As in previous months, the heavy lifting is borne again by Bitcoin Cash whose physical spending grew 13.9% to $59,773.02 up from $51,996.73 overcoming the drag induced by altcoins declining 43.3% or $2,401.1 down from $3,728.32. Of note is that Bitcoin Cash spending growth of 13.9148% is more than 50 fold greater than the 0.3% growth that fiat recorded in the month prior [1].

The poor altcoin performance was precipitated by BTC/LN which collapsed to $358.05 from $869.74 and $418.40 from $1,287.12 respectively and have become all but irrelevant to merchants in Australia at this point.

To put this in some kind of perspective, the TravelByBit website claims 400 merchants that support their point-of-sale platform [3][4] however, these 400 merchants collectively recorded just 16 (BTC) and 25 (LN) transactions over the period. Sadly, the average BTC/LN merchant must wait an astonishing two years (775 days and 496 days respectively) before there is a need to dust-off their PoS terminal for a physical customer. Bitcoin BTC and Lightning has died in Australia.

Meanwhile, the Australian merchant love affair with Bitcoin Cash continues with now 96% of all physical merchant cryptocurrency spending in Australia conducted in BCH up from 93% in the month prior.

Australia truly belongs to Bitcoin Cash (BCH) and future reports will concentrate further on the Australian Bitcoin Cash merchant adoption.

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An expanding professional Bitcoin Cash economy

There are many professionals such as lawyers, accountants, engineers, doctors, electricians, etc., that have adopted Bitcoin Cash as a payment option and a number of big businesses also, such as independent projects, finance and development companies. As always, Bitcoin Cash walks-the-talk preferring contractors and professionals that accept Bitcoin Cash over others which have failed to recognize the Bitcoin Cash benefits. As Australia has several large Bitcoin Cash projects in the pipeline, some large Bitcoin Cash payments associated with these projects were recorded.

There are 4 significant Bitcoin Cash physical merchant payments in December. In each case, the business has a physical presence and advertises the acceptance of Bitcoin Cash as a payment option and in all 4 cases the actual invoice was obtained for confirmation by the reviewer.

Pricing-in reality

These reports appear to contradict what the market views as the most valuable cryptocurrency. For example, the market cap of BTC is some 30 fold higher than that of Bitcoin Cash yet the Australian physical merchants have Bitcoin Cash out-spending BTC 166 to 1. It appears the markets have some reality checks to perform.

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Conclusion

The Australian Bitcoin Cash economy grew 13.9% in December and accounted for 96% of all physical merchant cryptocurrency trade across the nation.

Bitcoin Cash merchants in Australia are able to field payment experiences capable of gaining market-share from even the best fiat systems, and December again recorded evidence of large scale projects beginning to harness the potential of his extraordinary technology. In Australia, Bitcoin Cash appears to be growing in several directions at the same time.

In contrast, markets appear to be slow to price-in the real value of Bitcoin Cash which is clearly out-performing all other cryptocurrencies in a broad range of measures. Institutional investors should consider the importance of the Australian Bitcoin Cash coal-face performance as a potential leading market indicator and act accordingly.

Industry is beginning to speak and there can be no doubt what is being said - Bitcoin Cash is destined to be the first global electronic cash system as intended.

[1] https://www.abs.gov.au/AUSSTATS/[email protected]/allprimarymainfeatures/3DDA13ECDC094B1CCA257734002042F2?opendocument

[2] https://travelbybit.com/shops-that-accept-bitcoin/

[3] https://micky.com.au/fast-food-chain-adopts-bitcoin-wants-coca-cola-to-be-next/



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