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So, you start by assuming the answer to your own question:

"This means either merchants aren't seeing too many bitcoin sales OR a lot of these sales are happening offchain through coinbase/bitpay." (...) "in the latter scenario..."

And then you say something that makes little sense... what giant fee are you talking about?? Merchants are actually offering DISCOUNTS for payments via Bitcoin.



I explained what fees I am referring to in my comment.




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