Cryptocurrency investments have become a relatively famous trend nowadays. The crypto adaptation is way past mere retail now. Institutions like privately traded companies and governments are bringing crypto into the fold.
Before we dive in further, let’s discuss what cryptocurrencies essentially are and the purpose they serve. Cryptocurrencies are digital currencies or virtual wallets that individuals can use to exchange goods and services without third-party involvement. There are more than 19,000 cryptocurrencies currently available in the market. However, each has varying features. Bitcoin was the first cryptocurrency invented and is still the most popular today. Other trending cryptocurrencies include Ethereum, Fantom, Terra Classic, and Grove3.
Although cryptocurrencies are not a new concept, it has only recently gained momentum. That is because more people are starting to realize its significance and worth. The decentralized nature of cryptocurrencies proves an effective mode of transaction. They are secure, private, protected from inflation, and self-governed.
Experts claim crypto can be excessively beneficial for businesses. However, several business owners are unaware of ways they can leverage crypto in their business. This article will shed light on a few strategies to help incorporate crypto into your business.
1. Diversify the company’s portfolio
Many people still consider cryptos exceedingly volatile and highly risky as an investment. However, people fail to realize that crypto can be an excellent way to diversify your investment portfolio. The most significant benefit of using crypto as an investment is its lack of interdependency on other assets and market conditions. For instance, crypto prices will remain unaffected if the stock market crashes or real estate tumbles.
Moreover, if you conduct a quick analysis, you’ll realize how far cryptocurrency prices have come. When first released, bitcoin was worth $0, and now it sells for approximately $23,087.20. And all of it occurred in a matter of a few years.
While crypto is a pretty solid investment, you must not put all your eggs in one basket. That is, don’t spend all your money investing in crypto. Instead, consider a sum or budget for crypto investments and simultaneously look for other investment options. Remember, crypto’s disassociation with market trends doesn’t mean it doesn’t fall or rise. Crypto has its market, and trends keep changing.
2. Crypto as a payment method
The most effective way to incorporate crypto into your business processes is to use it as a payment method. Accepting crypto payments is a remarkable way to grow your business. It can significantly impact your sales since it opens a convenient path for foreigners to purchase from your brand.
Crypto payments are secure, faster, and independent of brokers. Transaction fees are low, irreversible, and transparent. Moreover, it is easy to implement, protects against fraud, offers instant cash flows, and has no central authority involvement. Nonetheless, make sure you understand cryptocurrency payments. Peer-to-peer payments are different from your regular transaction. Hence, you mustn’t confuse both.
Furthermore, it is vital to understand that crypto payments aren’t all petals and roses. There are specific consequences to look out for, such as volatile market prices, bans in some countries, taxation issues, and no proper regulation on charges.
3. Crypto wallets
Integrating crypto into your business’s payment processes doesn’t require many changes except setting up a crypto wallet and payment gateway. You can collect, store, and use your cryptocurrency in crypto wallets. Still, you will need a crypto gateway to convert your crypto money into fiat cash.
There are primarily three kinds of crypto wallets suitable for business use:
- Hosted wallets: hosted wallet is the easiest to set up and use. Your third-party base is responsible for holding and storing your cryptocurrency with a hosted wallet. If you purchase cryptocurrency through an app like Coinbase, your crypto assets automatically transfer to your hosted wallet.
- Self-custody wallets: also known as non-custodial wallets, allow you to own your private keys to self-custody crypto assets. The benefit of self-custody wallets is that the wallet provider cannot expose you to counterparty risks.
- Hardware wallets: hardware wallets are a little different from the rest. A hardware wallet is a physical gadget used to buy, sell, trade, borrow, and lend. All you must do is plug the device into your computer. Although hardware wallets are supposedly the safest way to secure crypto assets, possessing a physical device can be risky.
Setting up crypto wallets or gateways is essential to the entire payment process. After setting up your wallet, you must integrate crypto payments into your online checkout. You can use either the open-source API or the plugin/app approach. Some common crypto payment platforms with these approaches include BitPay, Coinbase commerce, and open node.
4. Secure loans
There are many advantages of using cryptocurrencies in your business. But a unique advantage is the possibility of using crypto as collateral to secure loans. Several companies offer business and personal loans in fiat currency in exchange for crypto as collateral. Crypto loans work similarly to mortgage loans and auto loans. That means you can use your crypto assets to pay for your company’s expenses without selling them. The only varying factor in crypto loans is that they require collateral instead of credit cheques. The responsible authority will seize your collateral if you don’t pay back the borrowed amount.
Crypto loans are beneficial for startups struggling to secure traditional bank loans. You can use crypto as collateral to gather the fundings you require to grow your business.
Unarguably, cryptocurrencies are here to stay. They will become colossal, and soon you’ll see people flipping out over crypto investments. Crypto is not only secure, but it is also a more accessible, more convenient alternative to fiat currencies. Moreover, accessibility, liquidity, user anonymity, transparency, and independence are highly attractive features rarely found in any other currency trading. Cryptocurrencies carry high return potentials, exponential industry growth, and low transaction costs. In short, crypto has many features that make it a perfect fit for businesses.
However, integrating crypto isn’t as easy as it sounds or occurs. To incorporate crypto in your business, you must understand blockchain, its operations, benefits, and the costs attached. Once you have thorough knowledge about the model, you will be able to strategize better and use crypto more efficiently and effectively.