It’s that time of the season. People are receiving gift cards and selling them on their favorite bitcoin marketplaces. Gift cards are one of the most popular payment methods on most peer-to-peer platforms. They are easy-to-use and very accessible as a gift during the holidays.
This year around, there’s one major problem: bitcoin’s prices have dropped severely in the past few months. The question is: “Will the low price of bitcoin affect the trade volume on a platform that specializes in gift cards?” Paxful Co-Founder and CEO Ray Youssef don’t think so.
Youssef explains that Paxful, a peer-to-peer (P2P) bitcoin marketplace that offers users to buy and sell bitcoin using more than 300 payment methods, will have the busiest time of the year on the week after Black Friday. He also explains that, just like last year, the rate of trades between gift cards and bitcoins is going to rise.
In a recent interview with Bitcoin Magazine, he said that “We calculated the rate of increase in total gift card volume from one year to the next… At that same rate, this year’s volume would be $15.3 million. This rate is approximately 271 percent. Given our weekly gift card volumes, it seems well within the realm of possibility.”
Not worried at all
On the day of writing, bitcoin was around (3,500 USD per 1 BTC) since the spike in late 2017 (where it ballooned to almost 20,000 USD per 1 BTC), people might wonder how that might affect the trade volume of gift cards on Paxful.
Youssef believes that if bitcoin’s price dropped even lower, he still wouldn’t be worried about it affecting trade volume.
“The price doesn’t matter so long as there are people who use bitcoin to translate money… To those in developing countries and countries with declining currencies, bitcoin has been their alternative currency,” said Paxful’s CEO Ray Youssef. He is still a firm believer in the good that bitcoin’s technology can bring. He backs up his stance by saying that “since January 2018, the price of bitcoin has been declining, but Paxful’s [trade] volume is continuously rising”.
Paxful’s repertoire of gift cards
Paxful has been in the gift card game for a long time now, and they’ve gotten good at it. According to their internal data, over $880 million worth of bitcoin has been bought via gift cards since Paxful’s launch in 2015. These purchases also make up around 64% of Paxful’s trades. Other payment methods such as credit/debit cards, bank transfers, etc. make up the remaining 36%.
Majority of Paxful’s gift card trading volume comes from trading iTunes gift cards (with a trading volume of around $482 million worth of BTC). Ranking in second and third place respectively are Amazon ($303 million) and eBay gift cards ($15.7 million). Other popular gift card options include Target ($15 million), Walmart ($12 million), Google Play ($5.3 million), and PlayStation Network gift cards ($5 million).
The importance of the peer to peer system
Although the hopeful CEO claims that gift cards are still a viable trading option on Paxful, he does, later on, admit that gift cards may not be the best items for receivers.
“Many people in developing countries have no use for these gift card credits. There are also users who have a website or a business as an affiliate for Amazon that maybe makes 10 percent in referring. People in the developing world don’t have Amazon in their areas, but they earn all these credits. Thus, they sell their credits for BTC and then turn the BTC into whatever currency they want. This is how P2P finance and bitcoin fills the voids.” according to Ray.
Youssef has been a long time advocate of the peer to peer system and continues to push the world to get in on it. Other than making it easy to buy bitcoin, he also believes that it can do a lot of good for the world.