Bitcoin Will Tank On Bitcoin Black Friday! – Bits & Pieces #5

Black Friday is by far the biggest shopping day of the year. I used to enjoy waking up at the crack of dawn to face the crowds, but that was years ago. These days, I enjoy skipping sleep altogether as most stores open Thursday night. The funny thing is, I often come home empty-handed, and it's not because I get in line too late. I think it's because of how much I hate spending money. I like the idea of super cheap stuff, but I can rarely bring myself to fork over even the discounted price for anything. Forget the sales though, what was that about Bitcoin tanking?

Bitcoin Black Friday

Let me set the stage by describing Bitcoin Black Friday. It is an event that some retailers created as a way to promote Bitcoin—and their own businesses, of course. Other than the focus on Bitcoin, it's not really any different than the rest of Black Friday. BitPay says that the "holiday" was a hit last year and this year should be even better.

My favorite stat: Amagi Metals brought in over $1 million in sales last Bitcoin Black Friday. We love that company. This year, even more retailers are accepting Bitcoin, including some big names like Overstock, Newegg, and Tiger Direct.

The Tank

Shouldn't all of this action be good for Bitcoin? Why would it cause the exchange rate to tank? In short, it's because those companies don't have much use for Bitcoin. As much as they might love it, they can't use cryptocurrency to buy more inventory from their wholesalers. Stores that accept Bitcoin are often forced to immediately sell any coin they rake in from consumers.

In fact, BitPay can automatically perform that conversion and does so for most retailers. Some have stated that they keep a portion of their revenue in Bitcoin, and that's fantastic, but it's not enough. When lots of people spend Bitcoin, lots of retailers have to sell Bitcoin so they can restock. And when coins get dumped on the exchanges, the price is bound to drop.

I'm not saying Bitcoin is doomed. I feel completely confident that the price will bounce back and I have no plans whatsoever to sell my own coins anytime soon, but I think it's only logical to expect a bit of a dip this week. Then again, I'm trying to predict the future, and that's darn near impossible.

Maybe Bitcoin will float along without so much as a hiccup. Maybe Overstock will announce an insanely thrifty, Bitcoin-only deal, tempting hoards of shoppers to buy Bitcoin so that they can get a huge discount. If Overstock was willing to keep most of that coin, the Bitcoin price could perhaps increase. Or for all I know, maybe some retailers will decide to keep all of the bitcoins they receive, just to see what happens. Regardless, I'm excited for Bitcoin Black Friday and it will be fascinating to watch any price action that results from the shopping extravaganza.