Report: The real impact of Overstock's $30,000 per day in bitcoin sales

Speaking with Business Insider in an article published yesterday, Overstock CEO Patrick Byrne noted that his company was seeing “$20,000 to $30,000” per day in sales. That total is less than the estimated $1 million per month previously claimed by Byrne, but he notes that the volume of sales is “gradually increasing” and the bitcoin experiment itself is “going well.”

Over at TechCrunch, writer Alex Wilhelm explores what that $30k figure actually means for a company like Overstock. Wilhelm estimates that Overstock currently rakes in about $3.6 million every day, and that bitcoin sales would therefore only account for less than one percent of total monthly sales.

The end result of Wilhelm’s examination is that not enough people currently use bitcoin to actually make a dent in bitcoin spending.

Food for thought: Total Bitcoin in circulation is worth $7.9 billion. In the past 24 hours, Bitcoin had volume of only $18.5 million. That’s about 0.23 percent daily turnover. Picking a random stock, say, Groupon, we see that its volume as a percentage of its similar market cap is 3.7 percent daily. That’s about 16 times as much as Bitcoin sees. I think this is the impact of having around half of all Bitcoin owned by fewer than 1,000 people.

But that’s not to say that Wilhelm’s take is negative. It’s more a “not there yet” assessment.

That wealth concentration means that the number of people who have enough Bitcoin to purchase items at Overstock.com is smaller than you might expect. That said, the larger Bitcoin network — so far as I can tell — is growing daily. So, expect to see Overstock.com move six figures a day in Bitcoin sales by the holiday season.

One interesting takeaway is that if demand for bitcoin-based services grow as more and more retailers adopt the platform, and those same 1,000 bitcoin holders don’t unleash their funds, the most likely result will be a dramatic uptick in bitcoin price.