Steam ends support for bitcoin due to high fees, volatility

Valve has stopped accepting bitcoin for Steam purchases, the game developer said Wednesday, citing the cryptocurrency's high fees and volatility as the impetus behind the move.

Along with bitcoin's skyrocketing valuation, transaction fees charged to customers have also risen dramatically, from the 20 cents when the company enabled bitcoin support two years ago to $20 last week, Valve said in a blog post. The decision was announced the same day bitcoin rose 18.2 percent to cross the $13,000- and then $14,000-per-coin trading milestones for the first time.

"These fees result in unreasonably high costs for purchasing games when paying with bitcoin," Valve said in a statement. "The high transaction fees cause even greater problems when the value of bitcoin itself drops dramatically."

Valve began accepting bitcoin on its Steam service in 2016 to accommodate international users who might not have access to traditional payment options. Valve's move was part of a larger acceptance of the digital currency, which is now accepted by more than 100,000 merchants worldwide, including Microsoft, Dish and Overstock.

Bitcoin has also proved popular with currency traders, going on a massive bull run in 2017. On Jan. 1 this year, bitcoin was priced at just under $1,000. On Wednesday, the currency rose $2,170 to $14,095 before settling to $13,696 as of this writing and giving it a market capitalization of $231 billion.  

Still, the cryptocurrency's lack of government backing and regulation has led to volatility. After crossing the $11,000 mark for the first time a week ago, the currency lost 20 percent of its value in one day.

Valve said that volatility can complicate purchases made on Steam, a platform and social network for buying computer games and software.

"When checking out on Steam, a customer will transfer x amount of bitcoin for the cost of the game, plus y amount of bitcoin to cover the transaction fee charged by the bitcoin network," Valve said. "The value of bitcoin is only guaranteed for a certain period of time, so if the transaction doesn't complete within that window of time, then the amount of bitcoin needed to cover the transaction can change.

"The amount it can change has been increasing recently to a point where it can be significantly different," the game distributor said.

As a result, Valve said, support for bitcoin has become "untenable," but it said it might re-evaluate the cryptocurrency's fit into its business at a later date.

Update, 7:45 p.m. PT: Adds bitcoin crossing the $14,000 trading threshold.

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