The past six months have seen the cryptocurrency market witness an unparalleled amount of financial volatility, to the point that total capital for this rapidly maturing space has fallen from $3 trillion to nearly $1 trillion. This comes after the industry reached an all-time high last November, with the price of Bitcoin (BTC) reaching $69,000.

Despite previously reported fluctuations, a recent report showed that small and medium-sized enterprises (SMEs) in nine separate countries, Brazil, Canada, Germany, Hong Kong, Ireland, Russia, Singapore, the United Arab Emirates and the United States, are very extreme. They are open to the idea of ​​accepting cryptocurrency payments – especially Bitcoin.

Within the study – which surveyed a total of 2,250 market entities – 24% of respondents said they plan to accept Bitcoin along with other digital assets in the near term, while 59% of respondents revealed that they plan to switch exclusively to digital payments by the start of 2017. 2025.

From the outside, crypto payments offer a host of benefits. For example, the issue of chargebacks or compliance with payment card industry standards is completely mitigated when it comes to digital assets. Not only that, accepting Bitcoin and other digital currencies can help attract additional business from crypto enthusiasts as well as multiply one’s earnings (since many of these currencies will become more valuable over time).
Does accepting cryptocurrencies really make sense for small and medium businesses?

According to Igneus Terrenus, an advocate for cryptocurrency exchange Bybit, Bitcoin makes perfect sense as an everyday medium of exchange for small and medium businesses. He told Cointelegraph that as a payment network, Bitcoin (when used in conjunction with the Lightning Network) unequivocally outperforms the seven-decade-old system that forms the basis for credit cards, adding:

“Bitcoin on Lightning is non-intermediate, has a back-end built into it, is faster, more secure, and is much cheaper in transaction cost than the roughly 3% credit card fee. The payment does not necessarily need to be settled in BTC since the Bitcoin network can take dollars and transfer them to BTC transferred over the network and converted back into dollars on arrival.”

When asked about the volatility side of things, Terrenus explained that if viewed on a shorter time frame, BTC is undoubtedly a volatile risky asset. However, if we look at it with a more panoramic view or rate it in relation to inflationary currencies such as the Turkish lira and the Argentine peso – which showed respectively increases of 73.5% and 58% in CPI levels for the month of May – it could still be very good. Be better at maintaining purchasing power than most fiat currencies during times of extreme volatility/bear markets.

Ben Caselin, head of research and strategy at crypto exchange AAX, agrees with this assessment, telling Cointelegraph that accepting Bitcoin as well as other more established cryptocurrencies remains the right course of action for most small and medium-sized businesses due to the large number of mechanisms in place for They have to take advantage of large liquidity pools and new demographics without being over-exposed to excessive market volatility, adding:

“Current market conditions may be bearish but the mass adoption of Bitcoin and major crypto infrastructure including the development of the Metaverse as well as integration with traditional financial markets continues to advance. For any company looking to enter the cryptocurrency ecosystem and economy, this is the time to pursue such These endeavors are in anticipation of the next stage of the adoption curve.”

The answer may be very simple

Lior Yaffe, co-founder and director of blockchain software company Jelurida, pointed out that business owners who want to accept Bitcoin but fear a serious price drop should simply “convert BTC into fiat currency as soon as they receive it.” In Yaffe’s view, the company’s decision to accept bitcoin should not be based on short-term price fluctuations, adding:

“Even with all the volatility, there are compelling reasons for small and medium businesses to accept Bitcoin, such as the ability to control funds directly without relying on the goodwill of a third party. Businesses that sell goods and services online and have problems using the existing credit card system, and businesses that fall into the Countries where the local currency is tight, and businesses that cannot operate with their local banking system can benefit from the use of BTC.”

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However, he acknowledged that there is no shortage of problems for entities accepting cryptocurrency payments these days as tax payments and business expenses need to be paid in local fiat currencies. As a result, accounting becomes more difficult and costly as increasing cybersecurity risks enter the fray.

Kene Ezeji-Okoye, Co-Founder and President of Millicen

Source: CoinTelegraph