With a large part of the world either in self-quarantine or staying inside to prevent the spread of COVID-19, it was largely assumed that online expenditure would experience a massive boom. However, that has not been the case as the first quarter of 2020 showed that online purchases from Bitcoin, Visa, and other retail apps being down.
While people are spending a lot of time at home and are not venturing out to stores much, the expectation was there would be a large increase in purchases made online and home deliveries, but that has not been the case as the global population seems to prefer to save their money rather than spend it.
Bitcoin Transactions Comparable To Those During Crypto Winter
The number of purchases and transactions using BTC fell by roughly 100,000 since the beginning of March. The last time the number of transactions was this low was when the price of BTC dropped to around $3,000 in December 2018, during a period known as “crypto winter.”
On Feb 5th, shortly before the spread of COVID-19 to may countries, the Bitcoin network celebrated as they passed half a billion transactions since the first one occurred on Jan 12th, 2009. These numbers indicated a more mainstream acceptance of cryptocurrency usage as a legitimate currency, the recent drop is a setback.
According to Mati Greenspan, a market analyst, people are just simply more hesitant about spending their Bitcoin at this time.
Sharp Drop For Visa
Visa too has seen a sharp decline. According to reporting from Reuters, Visa is predicting a revenue growth for the second quarter of the year of only a single-digit percentage increase. In 2019, Visa had double-digit growth in Q1. The dramatic drop in activity occurred during the month of March.
Reuters does report that while there is a lack of card swipe purchases due to the shelter in place measures and closures of many stores, restaurants, and entertainment venue, it is not the only reason for the sharp decline, as the online sales have also decreased significantly, including for some larger travel-related services like vacations and flights.
Payment Apps Used Less
Lower earning reports are also expected from Square, the company behind CashApp, which supports the use of cryptocurrency, claiming a 25% reduction in Gross Payment Volume. The company is going to withdraw their 2020 earnings estimates, and will be providing new ones in May.
Pizza Is On The Rise
But don’t fret, as at least one business seems to be seeing an uptick. Pizza deliveries have increased as more people order pizza to come to their homes. American pizza chain Papa Johns reported same-store sales rising by over 5% in the first quarter, as people in quarantine are relying more on food delivery options.
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