As the coronavirus wreaks havoc with the global economy, the number of transactions in crypto and fiat currency is falling to record lows.
Online purchases using Bitcoin (BTC), Visa, and some retail apps are down for the first quarter of 2020, spanning cryptocurrency and fiat currency transactions.
With many around the world self-quarantining or otherwise recommended to stay inside to prevent the spread of COVID-19, one might assume there would be an increase in online purchases and deliveries. Yet with unemployment on the rise and an uncertain economic future, it seems consumers want to save their money rather than spend it.
Bitcoin transactions rivaling those during crypto winter
The crypto market is not exempt from this dearth of purchases.
The number of daily transactions of BTC has fallen by roughly 100,000 since the beginning of March. The last time the number of transactions of the cryptocurrency was this low was during the “crypto winter,” after the price of BTC dropped to around $3,000 in December 2018.
Shortly before the spread of COVID-19 to many countries, on Feb. 5 the Bitcoin network celebrated passing half a billion total transactions since the first went through on Jan. 12, 2009. While these numbers indicated a more mainstream acceptance of crypto for everyday purchases, the recent drop is a significant setback to this goal.
Market analyst Mati Greenspan noted that “people are simply more hesitant to spend their Bitcoins at this time.”
Visa reports a sharp drop at the end of March
According to Reuters, Visa is predicting only single-digit percentage revenue growth — in contrast to the Q1 2019 double-digit growth — for Q2 after a sharp drop in activity during March.
Reuters says that measures like sheltering in place or lockdowns may be partially responsible, by preventing consumers from swiping their Visa cards in person at restaurants, entertainment venues and everything else they do outside their homes. However, there is also a lack of online spending including for larger travel-related services like flights.
Payment apps are not being used as often
Square, the company behind the Cash App — which supports cryptocurrency — is expected to report “lower-than-expected revenue and earnings” after claiming a 25% reduction in seller Gross Payment Volume on March 25. The company is withdrawing its 2020 estimates and will provide new ones in May as a result.
On a semi-positive note, at least the number of pizza deliveries is on the rise. American pizza chain Papa John’s said that same-store sales rose by over 5% in the first quarter of this year, as people in quarantine rely on delivery options for food.
Source: , CoinTelegraph
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