Marcus Richards
The business world is replete with stories of huge companies that were once tiny startups. These tales can be inspirational for anyone pursuing such a venture. However, in reality, there’s usually no guaranteed fairytale ending. In most cases, success requires a mixture of hard work, a good concept and smart moves.
Since Bitcoin’s success, the new cryptocurrencies creation process has grown massively, with new ones launching every day. Of course, businesses won’t accept every coin as there are now thousands in existing, but it can make good business sense to accept some of the more common options like Bitcoin and Ethereum.
Here’s a look at why accepting cryptocurrency is one of the smartest moves a startup can make.
Crypto Has Been a True Disruptor
Ever heard the phrase “the system is rigged” being thrown around? While the business world may not be as simple as a bunch of corporate overlords controlling the market and always keeping it tilted in their favor, there certainly is truth to the adage that it takes money to make money.
This is because starting a business requires capital. If you don’t have any, the next best solution would be to approach investors. Plenty exist, even ones specifically designed for funding startups. However, the problem is, none are likely to part with their money without the pot being sweetened first.
Most startups therefore generally have to trade a stake in the company for money to start it. This is where cryptocurrencies shine since they offer alternative choices that make them a game-changing disruptor in the finance industry.
The Perks of Cryptocurrencies
With the benefits of cryptocurrencies long since being accepted by the business world, new ones are popping up all the time. Governments have begun to regulate them, but for the most part, they still represent a means of avoiding traditional financial models.
Their popularity has led to them being widely accepted at every level of exchange from individual and retail markets, to high-end investing. In fact, most hedge funds now all have a cryptocurrency portfolio built into their macro investment strategies.
Given the full breadth of cryptocurrencies and their use, it is clear that they are going to play a considerable part in the future of commerce at all levels. As a medium of exchange, an investment option, and legal tender, here are why cryptocurrencies act as an ideal tool for startups to leverage.
The Benefits of Cryptocurrencies for Startups
Given how widely accepted cryptocurrencies are now, as a general perk, they offer startups greater access to markets. In simple terms, it helps cast a wider net over potential customer bases since customers who trade in cryptocurrencies are catered for too.
Simply providing this alternative may be enough to draw in some customers, especially if competitors don’t offer them. This also creates the perception of the business immediately being a modernized and sophisticated one.
While it obviously does pose a risk in terms of cryptocurrencies fluctuating in value, most major cryptocurrencies have consistently posted major net gains. This also allows customers to utilize crypto gains, and allows the company to build up its own crypto portfolio depending on how many types it accepts.
The flexibility of cryptocurrencies as a medium of exchange also means they provide greater choice. In this sense, they can also be used to provide incentives for customers. Rather than just being a means of tender, customers may also be rewarded with them or offered a discount for using crypto as a payment method.
Accepting cryptocurrency may also help a startup with international customers. For any transactions that require money to be moved internationally, crypto exchanges reduce waiting times since they can be traded instantly, and can be considerably cheaper by eliminating bank charges or commissions.
Other Ways Cryptocurrencies Can Benefit Startups
At the first stages of trying to get a startup off the ground, Initial Coin Offerings (ICOs) are becoming a popular method of raising capital. They basically work by startups creating a new cryptocurrency and offering it to investors in exchange for capital investments or other cryptocurrencies which already have a high value. In this way, startups are able to bypass traditional investment firms and may be able to raise adequate capital without needing to dilute their ownership of the business.
As reserves of a startup’s crypto assets increase, they may be liquidated to fund various business needs, used to buy other assets, or invested further. Where gains are made from them, these can be utilized in a variety of ways such as to service debt, make payments to investors, or reinvested in the company to drive growth and expansion goals.
The Benefits of Cryptocurrencies in General
As mentioned, cryptocurrencies can be very beneficial and lucrative to startups. However, aside from these perks, they offer other benefits in general which are largely contributing to their continuous growth.
Around the world, the popularity of cryptocurrencies have made them an obvious choice for anyone looking at long-term investment strategies. Now that there are so many available, with new ones being created all the time, this has also made them more accessible.
A greater number of cryptocurrencies now mean, like any commodity, there’s greater choice available in the market. Some coins can cost less than $1 each, while popular ones like Bitcoin trade for thousands of dollars for a single coin. This means, no matter what your budget is, the affordability of cryptocurrencies has largely diversified.
The fact that the entire concept runs on blockchain technology means there’s greater security offered. This makes international trading far easier, and unlike traditional monetary systems, there’s no centralized authority regulating cryptocurrencies.
Government regulation has begun around the world, and will continue to evolve. However, for the most part, this has enabled better peace of mind by helping to eliminate unscrupulous traders and scams. What we’re left with is a medium of exchange that is more lucrative, flexible, and secure than other currencies have ever been throughout history.
Conclusion
Startups often succeed or fail based on their ability to penetrate their target market. As the world evolves and cryptocurrencies and assets become more popular, their benefits continue to grow as a tool for startups to leverage.
Accepting cryptocurrency offers startups many advantages, but they may also be utilized in other ways that provide new companies an edge that helps them succeed.
