The Bitcoin price has now broken below $600. Here is Smaulgld, earlier this year when Bitcoin was at $650, discussing the declining Bitcoin price since Overstock started accepting it as a form of payment:
Bitcoin has Dropped over 25% since Overstock Starting Accepting it as Payment-RW
Wider Bitcoin adoption recently has not led to a higher Bitcoin price. In the past three months we have seen an acceleration in the number of merchants accepting Bitcoin, including online retailer Overstock. During this time there has also been a 40% drop in the price of Bitcoin. This is because most of the Bitcoin accepting merchants are also large sellers of Bitcoin as they are not really accepting Bitcoin; they are processing Bitcoin purchases through companies like Coinbase who immediately convert the Bitcoins into dollars for the merchants. It makes sense for merchants today to accept Bitcoin in this fashion as they avoid the Bitcoin fluctuation risk and they can sell merchandise to early Bitcoin adopters sitting on small Bitcoin fortunes that need to spend them before the price falls further.
If merchants don’t require Bitcoin use, no additional demand is created and therefore acceptance of Bitcoin by more merchants will not cause the price of Bitcoin to rise. Indeed additional merchant adoption might accelerate the dumping of Bitcoins and drive the price down.