There are some questions about running a business that are easy to answer. ‘Should I keep a detailed ledger of my expenses and profits?’ The answer is obviously, ‘yes’. However, other questions may not always be so simple.
When it comes to incorporating cryptocurrencies into your business operations, there are many things to consider. Like everything else, sitting down and analyzing your business situation is the best way to decide. Here are a few things to start with.
The rise of cryptocurrencies, such as Bitcoin and Neo
Whenever anything goes on a big run in the financial markets, you have to take note of, at least. However, this recent spike for cryptocurrencies is not the first time that they have made significant gains quickly.
Everyone remembers the rush in 2017 when Bitcoin ultimately topped out at over $19,000. Although it would fall back down, it established a new floor that was significantly higher than it had been previously.
As these cryptos continue to persist and grow, it is important to give serious thought to the role they will play in our businesses moving forward. We mention Bitcoin and Neo exclusively because it appears as though they may very well be the two major players in this market for years to come.
What is Neo?
For those who may not be familiar with it, Neo has been referred to as the ‘Chinese Bitcoin’. It is the nation’s first and largest cryptocurrency. It has already been shown to hold steady and improve through one of the biggest economic downturns in history. Since its many proponents believe that it is designed on the ‘economy of the future’, there are several respected voices telling of a bright future and a sharp rise in the next five years for the Asian digital currency.
Cryptos in general are becoming more common
This means that many more casual investors and average buy Neo, Bitcoin, and other digital currencies and who are doing so regularly. Since buying and investing has become so easy these days, it is as simple as logging and clicking a link. As a business, it may make sense for you to engage this audience and make your products and services available.
Although Bitcoin is becoming more common in its use and acceptance, it is rapidly becoming less common in availability. Only around 3m of the original 21m+ coins are still available. With the demand soon outgrowing the supply, getting in on the market before it transitions may be very important.
The influence of institutional and retail investment
The biggest driver in the current Bitcoin (and general crypto rally) is the influx of big-time investors and hedge fund money into the market. Unlike the first significant rise in BTC, which took place in 2017, this jump in value isn’t due to a wave of retail investments from the average Joe. A sharp pullback also followed the first big crypto rally once the initial craze began to fade. It was speculation from casual investors that created the gains that cryptocurrency first enjoyed.
However, this second rally is born from the increased purchasing activity of the same players who just a few years ago declared that Bitcoin and other similar exchanges were a ‘scam’ and ‘headed for zero’. The only question that remains is how long the retail investors will stay on the sidelines while the institutional investors grab up the assets.
With authorities in the financial field such as Paul Tudor Jones and Stanley Druckenmiller putting their investments in Bitcoin and noting its position as a possible hedge against inflation, it is becoming a much more acceptable commodity within the markets. And with giants such as Microsoft, Wikipedia, and many more now allowing the exchange and holding of cryptos on their platforms, it is only a matter of time before they become part of every investor’s portfolio to some extent or another.
The advantages of using these currencies for businesses
There are several worthwhile benefits to involving cryptocurrencies in your business activities. It isn’t just about another type of payment to accept. This transaction method offers versatility, fraud reduction, lower processing fees, and added security, just to name a few examples. However, there may also be a few drawbacks, depending on the type of business you run and the various laws and guidelines that regulate it.
