Dell and Other Retailers Accept Bitcoin, But Customers Are Slow to Adopt

Jacob Harper  |

In January 2014, (OSTK) began accepting the cryptocurrency bitcoin as payment for its various items. This in and of itself should be nothing notable for a currency, as even digital money should be theoretically tradable for goods and services. But since its inception bitcoin has been used more often as a speculative instrument than as one used to buy things. On its first day accepting bitcoin (Jan 10) Overstock sold $126,000 USD worth of goods for bitcoin.

But the public’s interest in actually using bitcoin to buy things soon waned. In late May Overstock CEO Patrick Byrne claimed the company had received $1.6 million in payments in bitcoin to that point. That looks like nothing to sneeze at – until you consider that Overstock’s total annual revenues will probably top $1.4 billion this year. Even a generous estimate doesn’t put the company’s total percentage of goods sold in bitcoin at any more than 0.3 percent. And the daily sales percentage is falling, from that $126,000 initial tally to its current average of less than $10,000 a day.

This has been quite a radical departure from Byrne’s March predictions. Two months into the bitcoin experiment, Byrne told Coindesk he predicted bitcoin sales would hit the $10-15 million range for the year, or possibly even $20 million. Sales will most likely fall more into the $3-4 million range for the year.

For Overstock, the first high-profile retailer to accept bitcoin, early predictions haven’t come close to reality. The novelty of getting customers to pay with bitcoin appears to have withered.  But that hasn’t stopped other tech companies from following suit in accepting the nascent digital commodity/currency.

Bitcoin Sales Tallies Propped Up By Accompanying Specials

DISH Network (DISH) made waves when they announced they'd be accepting bitcoin as payment. Online retailer and tech crowd favorite Newegg began accepting bitcoin in July 1. For the month of July the company offered a 10 percent discount for using bitcoin (on purchases under $100, that is).

On the more recent front, Michael Dell revealed via Twitter (TWTR) that his eponymous computer company would begin accepting BTC as payment as well, making them, in Dell’s words, the “world’s largest ecommerce business to accept bitcoin.”  

If Overstock is any indication, Dell’s acceptance of BTC should lead to the expected one day spike. This can be attributed both to bitcoin aficionados throwing their support on an ideological basis and folks just looking to take advantage of the accompanying promotional special 10 percent of Alienware products. The question is if those bitcoin sales will be sustainable, or if the novelty will wear off and BTC acceptance will shrink to a fraction of the retailer’s sales, as has been the case with Overstock.

Of course, for bitcoin to be a viable currency people actually have to be spend it. Companies like Overstock, Newegg, and now Dell certainly provide the platform for people to do so. But then after the promotions that provide a brief spike in revenue, it’s up to the market.  If people find it advantageous to spend their bitcoin on goods, they will do so. While bitcoin has made big strides in moving past its black market-heavy past, for the most part they're not finding a good reason to do their shopping in BTC.

Companies certainly get a bump in sales from accepting bitcoin. While not a monumental increase, Overstock did experince a 4 percent uptick in sales on the bitcoin promitonal day. But after the free publicity the get from tech blogs and r/bitcoin and the like that drive traffic to the retailers which provide those bumps, interest in paying with the highly volatile BTC appears to wane significantly.

Dell will undoubtedly get a bump the first day they accpet BTC. But afterwards, will bitcoin sales pick back up and not disappoint after that initial promise, as they did for Overstock? They will when and if customers see an advantage in paying with bitcoin when there's no price break for doing so. Or, if they continue to get specials for doing so. In early July Byrne hinted that he would seek to incentivize partners to give specials to accept bitcoin, further establishing his position as a favored figure in the bitcoin movement. And of course, creating further buzz in the bitcoin world to drive its business back to his site.

Otherwise, if more specials can't lure folks into making their purchases with bitcoin, people will continue using bitcoin for its most popular function: as a way to store wealth, and not for spending it on stuff from an internet retailer.

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to:


Symbol Name Price Change % Volume
DISH DISH Network Corporation 30.65 -0.15 -0.49 3,838,610 Trade
OSTK Inc. 17.22 -0.76 -4.23 1,064,766 Trade
TWTR Twitter Inc. 35.87 -0.02 -0.06 19,528,499 Trade
FC.DB.F:PUR Firm Capital Mortgage Investment Corporation 5.50% Convertible Unsecured Subordinated Debentures due Dec 31 2022 101.01 0.00 0.00 0



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