If you’re a business, and you handle money for any reason, then you should learn about bitcoin. Simply because bitcoin isn’t going away. In some way, shape, or form, bitcoin is going to stick around. The sooner you learn how to use bitcoin, the sooner you can use it to give yourself more financial optionality.
In this letter, I’m going to list out 5 ways that bitcoin and/or cryptocurrency can benefit your business.
1. Free Marketing and Exposure
Any business that aligns themselves with bitcoin, is likely to benefit from its network effects. Even through a simple act such as accepting bitcoin at the point of sale can provide you with free advertisement from followers and proponents of bitcoin.
In the case of Tahini’s Restaurant (Ontario, Canada), bitcoiners all over Canada make a sort of pilgrimage to eat at Tahini’s.
The NASDAQ traded company MicroStrategy’s stock quadrupled after they announced that they were turning their company’s cash reserves entirely into bitcoin.
People, not just bitcoiners, will talk about your business, and if they’re talking about you, they’re thinking about you.
2. Grow and Preserve your Cash Reserves
Focusing on MicroStrategy for a moment, the entire reason they converted their cash reserves into bitcoin was to preserve the buying power of their company’s treasury. They were sitting on $500 million worth of cash, and as Michael Saylor describes it,
We were sitting on a 500 million dollar melting ice cube of cash. We had to do something. — Michael Saylor
Go Full Crypto produced a case study on MicroStrategy and their decision to adopt a Bitcoin Standard.
My company (Go Full Crypto) converted our cash reserves into bitcoin in August of 2020. We did so for similar reasons. We were sitting on cash that wasn’t really growing, it was just sitting there. In many ways, it was losing purchasing power during the first 6 months of the pandemic.
We are a company that is entirely funded by its own profits, so every financial decision we make needs to allow us to step up our game. Adopting the bitcoin standard has done just that.
3. Open New Revenue Streams
When you broaden your definition of money, it becomes a lot easier to start accepting more of it. There are people out there that think Dogecoin is money. Who am I to argue with them? I’ll happily accept DOGE as payment; as soon as I receive it, I will convert it into bitcoin.
I am open to receiving anything that I can quickly and easily turn into CAD or BTC. Beginning to accept cryptocurrency as a method of payment means that you’re diversifying your revenue streams.
4. Diversify Your Company Assets
I’m not suggesting that you Go Full Crypto with your company. That sort of strategy may only work for a certain subset of companies; don’t forget, we’re all still super early to cryptocurrency in general.
With that being said, converting a small percentage of your cash reserves or treasury into a hard asset (like gold) is a time-old diversification strategy. Bitcoin is an insurance policy against the failure of the World Reserve Currency, the USD. It is a hedge against inflation. A good, balanced portfolio is holding assets that safeguard against total economic peril in any event. Bitcoin (in theory) protects you against certain monetary events like inflation.
5. Save Time + Money on Transactions
The last reason is fairly straightforward. Merchants can pay credit card payment processing companies between 1.5% and 5% of their sales. Companies making international payments will pay a similar percentage to transfer money abroad. The payer and the receiver must wait for the payment to “clear” which can take days, or weeks.
Large transfers are reported to financial authorities, notifying them that there was a sizeable transaction between the payer and the receiver. If suspicion is raised, then the transactors can expect delays, additional fees, or the seizure of their funds.
Cryptocurrencies can
Drastically decrease the time it takes to make transactions
Reduce the fee to send to sub $5.00 levels for virtually any transaction
Reduce the fee to receive money to pennies on the dollar
If the receiver needs to then convert the cryptocurrency into fiat currency, they will have to pay a fee to make the exchange. Typically on the order of 0.5% - 1.5%+.
What are you Waiting For?
So there you have it. Five good reasons to at least start looking into adopting cryptocurrencies for you business. There are many ways to do it, and really no downside to committing to learning more. The upsides are ready for you to take advantage of, and all you need is a little education.
Regards,
Keegan