How to solve the volatility problem in crypto payments?dredin
Crypto payments undergo the real splash, as businesses understand the fast-growing potential of digital assets. As of today, more than 20 000 companies worldwide accept Bitcoin payment, and such giants as Microsoft, Starbucks, Tesla, and Xiaomi are on the light side. Corporations hire specialists to join the trend as well, but there is the limiting factor that keeps the industry down. Crypto volatility is among the most prominent fears of merchants who are going to enter the market.
Bitcoin is the most popular digital asset used as a payment option – more than 91% of all crypto-friendly companies accept BTCs. While talking about the 30-day Bitcoin/USD volatility, 16.11% is the ATH (June 13, 2011). As for the last year, the highest volatility index is 10.88%. Such an index is high enough, and merchants are afraid of possible losses. Bitcoin is a perfect investment instrument with an ROI of over 36000%, but this digital currency is a two-edged sword while talking about short-term investments.
When compared the BTC/USD volatility to the most traded fiat pair, the USD/EUR 30-day volatility has never crossed the level of 1%.
What are the possible ways to solve the Bitcoin volatility problem? Two possible solutions appear: either accept stablecoins or get digital assets automatically converted into fiat currencies. Let’s dive into both cases.
Stablecoins to make the future of crypto-payments bright
Since the cryptocurrency volatility problem had questioned the future of crypto-payments, the market started looking for non-volatile solutions. Tether, the first stablecoin, came into existence in 2015, opening new horizons for crypto payments.
Stablecoins are backed by fiat currencies as 1:1; this is why holders’ funds are protected enough. At the same time, stablecoins get all the benefits of digital currencies as a class. The role of such coins is on the rise, and two main stablecoins (USDT and USDC) are included in the top-10 crypto ranking according to their market capitalization. According to the 24h trading volumes, USDT heads the crypto market.
This said merchants may either accept stablecoins or exchange received digital currencies into stablecoins with minimum fees. For instance, USDTs are equal to fiat dollars, and when a holder gets 100 USDTs, he (she) may understand them as $100, as every token is backed by 1 fiat USD.
Get fiat money to your banking accounts
The second way to accept crypto payments without risks lis in the possibility to convert received digital currencies into fiat ones. Some reliable providers, including the award-winning B2BinPay, empower merchants with such an opportunity.
When a consumer uses digital assets to pay for a certain good or service, a provider converts cryptocurrencies into the chosen fiat currency automatically and sends funds to the given banking account. This is why a provider protects business owners from all the risks. The processing fee depends on the provider. For instance, B2BinPay charges a 0.5% commission only.
As such, crypto payments can be not related to risks. A merchant is a master, deciding on his (her) own whether to avoid volatility or use digital currencies as an investment instrument.