In five years, active Bitcoin users around the globe will number nearly 5 million, up from just over 1.3 million in 2014, but use of the currency will continue to be dominated by exchange trading rather than at retailers, according to a report released Tuesday by Juniper Research.
While some high-profile retailers are enabling Bitcoin payment, activity levels both online and offline are extremely low, the U.K.-based provider of research services found.
Average daily transaction volumes have increased about 50 percent since March 2014, but much of the growth seemingly stems from “higher transaction levels by established users rather than any substantial uplift in consumer adoption,” the report said.
The difficulty of communicating the concept of Cryptocurrency payments to end users, along with Bitcoin’s history of being linked with — and continued use by — criminals for illegal purchases and money laundering, were among the factors inhibiting growth, the report found.
Examples of the bad press related to the currency include last month’s apparent theft of $387 million in client funds from a Hong Kong exchange that traded the virtual currency, and the more notorious crash and burn of Bitcoin payment network Mt. Gox last year.
Speculative hoarding of Bitcoins is restricting supply of the currency, with the alternative coin market plagued by “pump and dump” currencies created solely as short-term investment vehicles, Juniper Research found.