Stripe, the internet platform for ecommerce and online payments, said on Wednesday it would no longer support bitcoin as a means of online payment.
The company said it remained "excited about the possibilities of cryptocurrencies" but considered bitcoin too volatile to be useful for online transactions.
"By the time the transaction is confirmed, fluctuations in bitcoin price mean that it’s for the 'wrong' amount," said Tom Karlo, payment methods and dashboard product manager at Stripe, on the company's blog.
Fees too expensive
Karlo added that fees for regular bitcoin transactions were as expensive as bank wires - amounting to several tens of dollars per transaction.
To this end, he added that bitcoin had evolved to become better-suited to being an asset than being a means of exchange.
He said: "Because of this, we’ve seen the desire from our customers to accept bitcoin decrease.
"And of the businesses that are accepting bitcoin on Stripe, we’ve seen their revenues from bitcoin decline substantially.
"Empirically, there are fewer and fewer use cases for which accepting or paying with bitcoin makes sense."
Winding down support
The company will start to wind down support for bitcoin payments immediately, it said, and will work over the next three months to ensure a smooth transition before stopping bitcoin transactions outright on 23 April.
The move by Stripe was a blow to supporters of bitcoin as a means of transparent ecommerce transactions, but regulators were likely to still harbour concerns over bitcoin's use as payment in illegal activities.
Stripe, meanwhile, said it remained optimistic about cryptocurrencies overall and that it would likely enable support for them in the future.
Remains upbeat on cryptos
Carlo added: "We’re interested in what’s happening with lightning and other proposals to enable faster payments, more broadly, ethereum continues to spawn many high-potential projects.
"We may add support for stellar (to which we provided seed funding) if substantive use continues to grow. It’s possible that bitcoin cash, litecoin, or another bitcoin variant, will find a way to achieve significant popularity while keeping settlement times and transaction fees very low."
The news, however, had little impact on the crypto-market in early London trade on Monday.
On the bitstamp exchange, bitcoin was 7% higher at $10,995, ethereum added 6.55% to $1,000.20, ripple gained 12.32% to $1.378 and litecoin climbed 5.56% to 179.36.