In 2016 Bitcoin rose 125 percent in value, and it started 2017 by topping the $1,000 mark for the first time in three years. After reaching a high of $1,153.02, the crypto currency once again showed its volatility by dropping $200 on January 5 in just one hour. It currently stands at $970.18 as of this posting.
Just in case you don’t know what Bitcoin is, it is a form of digital currency that is created and held electronically. It is produced by people using software that solves mathematical problems. The value is based on supply and demand, so the more demand the higher its price, and accordingly, if there is no demand the price falls.
This is not the first time Bitcoin has gone through this type of volatility. In 2013 it experienced a tenfold increase in just two months and when one of the largest Bitcoin exchanges, Tokyo’s Mt. Gox was hacked it plummeted under $400. But it has been relatively stable since that incident.
Bitcoin is not the only cryptocurrency, but it is the most popular one. And as such, more people use it to carry out transaction online and in the real world. Its popularity has resulted in many retailers accepting the currency for payment, with some banks even providing ATMs with Bitcoin capabilities.
What’s the Impact of Bitcoin Value on Small Businesses?
One thing to understand about Bitcoins for a small business is, the volatility in its value will not affect your bottom line. Only if you are using Bitcoins as an investment vehicle will you be subject to the ups and downs.
However, if you want to start accepting Bitcoins in your coffee shop, it will be just another payment system. But it does have some benefits in that you will not have to pay the 2-3 percent credit card fees.
Bitcoin Photo via Shutterstock
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I have always been intrigued by Bitcoin. At first, I thought it was only a form of online currency. But now, I realized that it has grown so much that it has become a crucial part of the Internet marketing world.
Although Bitcoin started as the original form of truly digital cash, it is much more than that now. The ledger that enables Bitcoin transactions is now being used to record land titles, stock ownership, and digital identities just to name a few of its important uses. As a form of payment, it is especially useful to businesses who need to handle cross-border transactions involving multiple currencies. So even though most small businesses don’t need to deal with it directly, unless they choose to accept it as a form of payment, it is still likely that we will all be affected, at least indirectly, by this new technology as it matures and takes hold.
The benefits of using Bitcoin to handle cross-border transactions involving multiple currencies as you mentioned is undeniable. And as it matures, it is an eventual more local small businesses will also use it as a form of payment for B2B and B2C.
Great article, Bitcoin and other cryptocurrencies really come into their own for big and small businesses when it comes to international payments. Attempting to wire, or bank transfer funds from an individual in one country to another for a service can incur huge fees and even longer delays before the vendor actually gets paid.
As of 7-17-2017 Bitcoin is at $1934.90, so it has grown by a little under $1,000 in the past seven months. More people are relying on the technology because of the benefits you mentioned, and it is only going to grow as developing countries become more connected.
I am Maggielan
As a form of payment, it is especially useful to businesses who need to handle cross-border transactions involving multiple currencies.