Cryptocurrencies have featured in almost every industry across the globe; however, it’s undeniable that it’s made a lasting impact on start-ups in particular. With the a single Bitcoin being worth £7290 at time of writing, there’s a huge profit potential there, but it is really worth it considering the volatility of this particular cryptocurrency? This is a common debate for start-ups, and while you can find a guide to cryptocurrencies online to help you understand how the currency works a little better, will it really have a positive effect for your business?
Professional Investors Have Jumped On The Bandwagon
In one way, yes it will – Or at least, professional investors seem to think so. Despite the number of ICO’s decreasing quite fast, the interest from investors is still on the rise. Professional investors across the globe are now accepting cryptocurrencies such as Bitcoin as a legitimate asset class, making more room for financial growth and more credibility for the industry. As a start-up, you’ll usually look up to professional investors and competitors to see how they’re dominating the industry, and truthfully it will often involve an investment into cryptocurrencies
More Privacy & Security For Customers
When opting for your business, customers are going to be searching for an exceptional service that they feel safe and comfortable with, and Bitcoin and other altcoins can provide just that. In fact, research conducted by Statista found that 17% of shopping cart abandonments were due to the fact that customers were concerned about payment security. When opting for cryptocurrency transactions, customers can bypass inputting personal details online, as digital currency transactions rely on a send-only protocol. As a result, criminal offences such as identify theft are decreased, as there’s simply no information to hack into! As a start-up, this is a great way to build your client base and stand out above other competitors.
It Makes Financial Management Slightly More Difficult
Many would argue that Bitcoin is streamlining the financial industry thanks to its decentralised platform and ability to keep customers anonymous, however it also makes a lot of financial management processes more complicated than they need to be, particularly for start-ups. Because of their decentralisation, preparing important financial documents such as financial statements, taxes and determining general prices can become a difficulty. Tax alone becomes much more complex when using crypto assets, as they add uncertainty on top of tax payments and whether or not you comply with the Section 1031 of the tax code.
Lack Of Regulation & Stability
By accepting cryptocurrencies, you may be limiting the potential for global expansion. In reality, there aren’t that many countries that are willing to accept digital currencies, branding them as illegal. Furthermore, as cryptocurrencies remain unregulated in several countries across the globe, there’s a lot of uncertainty surrounding how successful accepting cryptocurrencies can be on a more global scale. What’s more though is the volatility of the cryptocurrency. For start-ups, remaining financially stable is the best way to build up your business, so jumping into the cryptocurrency market head-first could be a very unwise move to make.
The bottom line is that you should definitely invest in cryptocurrencies as a start-up. Once you’ve managed to invest in software that makes the management of the digital assets easier, and you’ve established your target audiences in accepting, regulated countries, you’ll have huge profit potential!
