It’s been 18 months since Bitcoin burst onto the main stage and stole the proverbial financial show. The invention of Satoshi Nakamoto waited in the wings for nearly a decade before it finally attained the mainstream mind and market share that seemed improbable from the onset.
Now, Bitcoin’s value hovers around $7,000, and it’s joined by a cadre of other prominent currencies that together create a dynamic crypto ecosystem that is significantly disrupting the traditional financial system. Impressively, the list of new coins is continually expanding. According to data compiled by CoinSchedule, 427 new tokens launch so far this year, and they’ve raised more than $10 billion in the process.
All of this activity has garnered cryptocurrencies a considerable following. A survey conducted by Finder found that nearly 10 per cent of Americans own cryptocurrencies. This is a relatively modest percentage, but it represents around 30 million people with cryptocurrency to spend.
What’s more, a recent SurveyMonkey study on cryptocurrencies found that the majority of cryptocurrency owners are millennials, and a considerable percentage are even younger than that. Cryptocurrencies are a brilliant match for the digital-first ethos of younger generations.
For retailers, this presents a profound opportunity to cater to crypto owners by meeting them at the register. Supporting cryptocurrency payments is a way for companies to differentiate themselves from the competition and to open their business to the millions of people with crypto to spend.
The problem of payment
Despite its rise to prominence, digital currencies have had a difficult time functioning as such. Some retailers like Overstock.com eagerly embraced Bitcoin from the beginning, but most retailers have shunned the currency at the point of payment. As a result, cryptocurrencies are primarily relegated as speculative assets that are mostly unusable outside of crypto exchanges.
The problem is twofold. First, many cryptocurrency owners are reticent to spend their holdings. For many, Laszlo Hanyecz, who infamously spent 10,000 Bitcoins on two large pizzas in 2010, serves as a warning about spending the currency before it’s fully appreciated. In today’s Bitcoin values, Hanyecz’s pizzas cost about $80 million.
Meanwhile, many retailers don’t have the technical capabilities to handle crypto payments. Moreover, crypto markets are notoriously finicky, and they can endure rapid price fluctuations that make actual purchases difficult. However, for retailers, the ability to capitalized on the burgeoning crypto market is too good of an opportunity to just pass up.
The opportunity for retail
For instance, several platforms exchange cryptocurrencies for retail gift cards. Zeex, the most comprehensive marketplace, offers gift cards to more than 350 prominent global retailers. Using popular cryptocurrencies like Bitcoin, Ether, Bitcoin Cash, or their native ZIX currency, anyone can quickly purchase digital gift cards that can be used to make real-world purchases.
This process is surprisingly simple, and, for businesses, it outsources the trouble of connecting the crypto community to their product or platform. For consumers, their cryptocurrencies become usable in a tangible way.
Especially for small and medium-sized businesses, this can be a significant differentiator in the market. They can reach a broader audience through their placement on gift card exchanges, and it opens their business to the millions of crypto owners with money to spend. Since many retailers have not embraced the crypto movement, there is considerable upside to being on the forefront of this tech revolution.
While gift card marketplaces are mainly comprised of large retailers, Zeex is developing an onboarding process for small and medium-sized companies so that they can be featured on their platform’s exchange. Therefore, these companies can attain placement next to big market brands like Amazon, iTunes, and Starbucks.
Cryptocurrencies have matured a lot since Laszlo Hanyecz made his unfortunate purchase, and they are positioned to achieve their original goal of facilitating digital p2p transactions. Businesses should cater to crypto holders by creating avenues for them to spend their cryptocurrency on their product or service. If they can’t do that directly, then working with a gift card exchange is a promising place to start.