Bitcoin is considered the most efficient decentralized payment method. With its state-of-the-art technology and groundbreaking aspects, it has evolved the FinTech Industry. As the world’s first Peer-to-Peer currency, it has revolutionized the process of making online transactions. However, the most valuable benefit is that its decentralized means there’s no intermediary or a central system that monitors the flow of this currency. That’s why many brands consider it as their payment method.
It’s a game-changer for many businesses. This way, they don’t have to rely on a bank for facilitating transactions. Moreover, their faster international transactions are supported by instant validation. Individuals can easily send and receive bitcoin outside the country in easy ways. It has no amount restrictions and demands no additional cost. The most valuable benefit is the protection against online fraud. Blockchain saves the process from cyber attacks. However, there’s a potential risk with accepting PayPal. credit/debit cards, and similar methods where you can reverse the payment on the bank approval. Like the customer who buys an online product via card can request a chargeback even after getting the purchased product. If by any chance, the request is approved, and he gets a refund of the money he paid, the brand will face a loss. It’s called chargeback fraud and it’s commonly occurring these days. However, bitcoin payments are irreversible. So, it’s safe and secure from these frauds.
As the world is getting modern, companies are relying on this technology for efficient payment methods. Almost every aspect linked with bitcoin is inspiring, but when it comes to price we get conscious. It’s not because of the high price of this currency but the unexpected increase and decrease in it with time. Like if you buy a women’s or mens leather jacket for $200, the price will remain the same after a week and probably even after a month. However, if you pay for a jacket in bitcoin, the price will probably change after a week because this currency fluctuates too much. So, your jacket’s value will be changed.
We observed the considerable fluctuation in the world’s largest digital currency by market value. According to data from Coindesk, the value was down 5% to $32,860.91. It was also determined that if the value drops below $30,000, it can even fall further to $25,000 before any “significant” move back up. It seems disappointing! But it’s only for those investing in blockchain as they will not get much profit now. It affects businesses in different ways while also influencing the behavior of customers towards online shopping.
Pros and cons of Bitcoin price changes for online businesses:
Bitcoin price fluctuation definitely affects businesses considering it in various ways. How much the business will get affected depends upon the way the company is relying upon it. Let’s check out how the last changes in the prices affect online businesses by determining the pros and cons in detail. So, let’s begin.
As we said above the men’s or womens leather jackets price can fluctuate even in a week, you can imagine how the costs of many products get lower with it. It’ll benefit in two main ways:
● Increase customer confidence towards BTC:
While calculating bitcoin price to dollars, customers would love to imagine that they have to pay less. Even if you increase the bitcoins required for the product with the drop in its price, customers will gain the confidence that they are paying in currency values less. They will think it’s easy to afford and would love to give money like this. Of course, on the other hand, if the bitcoin price is too high, people will feel unconfident and will hesitate to pay that way and can’t build a connection with your brand.
● Can boost your sales:
When people would love to pay in bitcoin and have confidence in your brand, it’ll definitely boost your sales. If you manage well to properly handle the situation, customers will remain connected with you even when the price increases.
● Cause mismanagement and problems in understanding the product’s value:
Sudden fluctuations in prices sometimes impact so considerably that you can’t even imagine. It can also affect your current plans regarding sales and purchases. But how? You set the prices for your products by simply comparing values in dollars and BTC. So, when the BTC value changes, you’ll have to modify all the prices set. There’s also another big problem with it. It causes challenges for customers to understand the product’s value because product prices remain changed in BTC. It’ll make them feel that their budget is getting disturbed where nothing changes as the company also changes its prices with it.
It’s not just for customers, but also causes mismanagement in everything regarding transactions. What about offers you have set? What about policies you have set? But one thing to notice is that it’s not such a big disadvantage leaving any permanent effect. If a company readily accepts the change and manages everything well it can reduce the effect. Moreover, if it guides customers well like sending them an Email (that they will not be affected anyways by price changes) they will remain connected with your company.
● Specifically disturbs bitcoin companies:
Sudden fluctuation in bitcoin especially with decreasing value demotivates people who want to invest in it for BTC trading. People become worried about its authenticity and think the price can again decrease to any extent. Who would love to invest this way? Moreover, if he sees the situation of anyone who bought bitcoin at a high price one day and its value got lower too much the next day. It’ll directly affect the companies offering the service related to bitcoin as their customers decrease.
So, that was all about the effect of bitcoin price on online businesses with the detailed pros and cons. We can’t clearly determine what will happen in the future as this unstable currency can even make you a millionaire or a beggar in a single night.