Overstock.com says it will net about $3 million in bitcoin-based sales for 2014, well short of prior estimates.
Estimates made earlier this year ranged as high as $20 million. More recently, the figure was pegged at $6-8 million, with a run rate achieving $1 million per month by year’s end.
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Sales were initially strong – $1 million within the first two months. Thereafter, the pace slowed to $2 million in seven months, at which time the $6-8 million figure was projected. At the time, we expressed doubt over this figure, which suggested a hockey stick-like jump in sales – on the magnitude of 2-3x – for the year’s remainder. Additional difficulties with the numbers were also expressed, so the revision to $3 million may help resolve these.
The latest figure implies that the pace of bitcoin-based sales fell to half their pre-August levels. It is possible that the initial pop was driven by excitement over Overstock’s bitcoin acceptance which at the time was uncommon for a company of its size. Since then, numerous other large e-tailers have begun to accept bitcoin in some form, including Dell and Microsoft.
For many consumers early on, the decision to spend with bitcoin was an ideological one. As the excitement tapers off, consumers have based their purchasing decisions on other factors. Though Overstock has offered incentives for bitcoin-based purchases, this may not be enough in the highly competitive landscape of e-commerce.