It’s been a roller coaster few weeks for bitcoin and its loyal followers. After reaching a fever pitch in value near $20,000 in late 2017, the cryptocurrency has had a rough 2018, plummeting to just over $11,000 at the time of writing. And now, it’s not only losing value, but it’s losing support from payment companies, too. This week, payment processing service Stripe announced that it would no longer process bitcoin transactions. The change will take effect in its entirety on April 23, 2018, and in the meantime, Stripe will be “winding down support” and working with affected Stripe users to ensure a smooth transition.
The decision, while not altogether surprising, comes as something of a blow to the ailing bitcoin. Stripe was one of the first payment companies to accept bitcoin, beginning its support in 2014. “At Stripe, we’ve long been excited about the possibilities of cryptocurrencies and the experimentation and innovation that’s come with them,” the company noted. “Our hope was that bitcoin could become a universal, decentralized substrate for online transactions and help our customers enable buyers in places that had less credit card penetration or use cases where credit card fees were prohibitive.”
Unfortunately, it’s become increasingly clear that bitcoin, at least in its current state, has not lived up to those expectations, and as such, a growing number of companies indicated they will not allow for the cryptocurrency to be used on their platforms. Steam, for example, ended support late last year.
Much of the problem with bitcoin is associated with its increased value as an asset. Paradoxically, as the currency has become more valuable, it has become less suited for payments. As Stripe noted, “Transaction confirmation times have risen substantially [and] fees have risen a great deal,” which has made customers increasingly wary about accepting bitcoin. Indeed, Stripe continued, “Empirically, there are fewer and fewer use cases for which accepting or paying with Bitcoin makes sense.”
That said, Stripe certainly isn’t bearish on cryptocurrency as a whole. In fact, the payment platform recently suggested that it could consider adding support for the coin Stellar (ironically, causing Stellar’s value to jump 20 percent). As the company concluded, “We will continue to pay close attention to the ecosystem and to look for opportunities to help our customers by adding support for cryptocurrencies and new distributed protocols in the future.”