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In the short span since its inception, Bitcoin has failed to spark the tsunami of mainstream popularity that many of the nascent technology’s evangelists believed it capable of inspiring. People around the world didn’t abandon their US Dollars or Euros in favor of cryptocurrency overnight, nor did companies begin accepting cryptocurrency for their goods and services all at once. The latter idea is the biggest indicator of critical mass, yet, support for cryptocurrencies in business is more evocative of a slow tide. It slowly creeps up to engulf industries and sectors over time.
With online payment channels growing at the same breakneck pace as eCommerce, cryptocurrencies are growing more relevant to business. Organizations which seek to integrate cryptocurrency at this stage are still considered pioneers, despite large companies such as Overstock.com, Newegg, Shopify, and Microsoft leading the charge. However, the recency of the trend is a boon for companies that get the recipe right and incorporate crypto payments in a responsible manner.G
Given the potential transactional and financial benefits of embracing this new technology, it’s no surprise that such impressive companies want to hitch their wagon to crypto’s fast-ascending star. Regardless of real obstacles such as taxes, cryptocurrency asset management, risks to the bottom line, and an inconclusive regulatory outlook, the upside of crypto integration is impossible to ignore. As the ecosystem matures, grappling with these ideas is also much easier. These five tips are designed to help support your own cryptocurrency integration ambitions and eventually realize the accompanying rewards.
1. Maintain a Diverse Portfolio
While there are many reasons to accept cryptocurrencies beyond speculative investing, the opportunity to expose a portion of your company’s portfolio to cryptocurrency is too good to pass up. When keeping cryptocurrencies on your balance sheet, the old rule about diversifying your baskets still applies. Volatility in Ethereum may not match that of Bitcoin or other currencies and maintaining a healthy mix of coins means you’ll get the average of the greater market, rather than being at the mercy of a single project’s whims.
For customers who may prefer to transact in one coin versus another, it will be easier to handle their requests if you’re familiar with multiple crypto ecosystems and wallet structures. This diversification endeavor pertains to stable coins as well, which are a great way to instantly reduce crypto market exposure by exchanging more volatile coins for those that are pegged to fiat currencies. Finally, having a diverse array of coins means that in many cases, you can pick which to transact in. This choice lets you exercise greater control over your finances by transacting in coins with lower fees or faster transaction confirmation.
2. Practice Smart Financial Management for Crypto Assets
Part of running a crypto-integrated business is tolerating the young ecosystem’s learning curve. There are many disparate cryptocurrency wallets, exchanges, platforms, and tools that you’ll combine into a mix that works well for your business. However, mobilizing this blend of technology isn’t convenient, and makes it hard to visualize your total portfolio value or recent performance, handle taxes, and chase down loose ends. Entrepreneurs and CEOs are short on time and don’t wish to juggle multiple moving parts, however, the monumental task of keeping tabs on your crypto, is becoming easier thanks to crypto bookkeeping tools that have been developed to tackle that problem.
New tools enable retail and organizational cryptocurrency investors to gain a better grasp on their blockchain finances. Blox, for example, can sync between multiple wallets and exchanges, and acts as a consolidated crypto portfolio tracker that is entirely visible from one’s smartphone. With extra reporting and auditing functionality, the cryptocurrency ecosystem is easier to navigate for firms that need full accounting transparency.
3. Deploy All Types of Wallets
Banks haven’t begun dabbling in professional custodial products quite yet, though some of the more established exchanges offer half-measures in the form of offline custody or basic insurance. Fidelity is a more recent entrant into the custody arena specifically, but much of Wall Street remains wary of cryptocurrency. Regardless, without full support by the traditional financial industry and according regulations, businesses with crypto investments have full liability for the safety of these assets. It’s therefore more important to employ the full range of cryptocurrency wallet solutions.
For long-term investment, it’s always safest to store these cryptocurrencies in a hardware wallet or paper wallet. This limits liquidity but protects the coins with an always-offline wallet which is further secured by a private key, ideally only known by the CEO. Keeping a portion of your crypto capital on a soft wallet is also recommended, as these are online and available to use quickly, but also secured by a private key. Any cryptocurrency on an exchange isn’t entirely safe, but it is much more convenient for quickly re-balancing a portfolio.
4. Stick to Your Plan
While this tip also applies to retail investors, for business owners it is equally important to plan ahead and stick it out. It helps to pay little attention to crypto market charts, which are designed to produce a rash emotional reaction. Instead, slate a fixed percentage of profits or assets for investment into crypto, and don’t make sudden decisions to buy or sell based on momentary urges. A long-term outlook is usually best. Paying too much attention to your portfolio’s USD value instead of its BTC value may sabotage your ambitions.
For longer timelines, buy-and-hold is a justifiable strategy, but one that requires discipline. Frequent swapping in-and-out of fiat money can get expensive due to transactional fees but also because of the accompanying capital gains assessments. As long as you calculate your appropriate risk appetite and recognize the maximum downside before investing, a disciplined approach can prevent losses that exceed pre-defined levels.
5. Make It Easy for Customers
The biggest reason to adopt cryptocurrency payments for your website or business is that you’ll gain a new audience: cryptocurrency enthusiasts. With limited fungibility even years on, Bitcoin holders are happy to provide financial encouragement to businesses that support their hobby. Expanding the list of cryptocurrencies that you accept is savvy as well, but first, customers need to have a convenient way to send them to you.
You can always list a Bitcoin address in the footer of your website or payment page, with a long-form address or QR code. However, this won’t result in much. A plethora of online tools like BitPay and even Coinbase now make it easy to create and install custom ‘Pay in Crypto’ buttons to your business’s payment page and incorporate crypto into your Point-of-Sale systems, for instance. This empowers customers to easily connect their wallets, pay, and come back to shop again with the knowledge that shopping with you is both easier and less expensive than with the competition.
B2C for the P2P Crowd
At this stage, accepting cryptocurrency payments isn’t mandatory given their still-novel nature. However, we’re arrived at a time when not doing so amounts to leaving money on the table, and when concurrently, integrating support for cryptocurrencies is easier than it’s ever been. Businesses are waking up to this reality, and led by firms big and small, are slowly but surely providing the catalyst necessary to take cryptocurrency to the next level.
Disclaimer
The views and opinions expressed in this article are solely those of the authors and do not reflect the views of Bitcoin Insider. Every investment and trading move involves risk - this is especially true for cryptocurrencies given their volatility. We strongly advise our readers to conduct their own research when making a decision.