5 Tips to Consider Before Integrating Cryptocurrencies in Your BusinessWhether you have an interest in investing in cryptocurrencies using your company or you want to start using them and blockchain technology as a part of your business, there are a few things you need to be aware of.
Even though the cryptocurrency market has more or less plummeted since the end of 2017, the interest for these digital currencies is still high. During 2018 the focus in cryptocurrencies has slowly started shifting from mostly being an investment opportunity for private investors to something businesses are becoming more interested in.
Now, whether you have an interest in investing in cryptocurrencies using your company or you want to start using them and blockchain technology as a part of your business, there are a few things you need to be aware of. Before you start investing in cryptocurrencies with your business you need to consider the following.
Knowledge is everything
This might sound obvious, but you really must educate yourself before you get started. Most people have a vague idea of what cryptocurrencies and blockchain technology are, but a vague idea is not enough. In fact, most major losses and issues regarding cryptocurrency investments could have been avoided with some basic education. This is a completely new market and just because you know about stock or forex trading doesn’t mean you understand cryptocurrencies.
Also, learning more about cryptocurrencies will help you determine how you can best approach the market as a business solution. Do you want to handle cryptocurrencies as an investment or would you benefit from using Bitcoin as a means of payment? Maybe you want to run an ICO to create a new asset while funding your next development.
Are your customers interested in cryptocurrencies?
This is a question you need to ask yourself before you continue and you need to make sure that you’re right about the answer.
Over the past few years, we have seen that businesses that integrate cryptocurrencies experience one of two things. If their customers are okay with the idea of using or being associated with cryptocurrencies, the business gets a competitive edge which can be extremely important. There are several examples of businesses becoming industry leaders for being early adopters of cryptocurrency solutions.
On the other hand, a cryptocurrency integration has the potential to hurt a business if the customers are not interested in using digital currencies. Also, cryptocurrencies and blockchains are not a necessity for most businesses, and if it won’t help you solve a problem, you should consider holding off on the integration.
The lack of a middleman can mean two things
One of the main selling points of cryptocurrencies and the foundation that Bitcoin is based on is decentralization. Most cryptocurrencies, with a few exceptions, are decentralized to a certain extent, and that alone creates unique possibilities.
The lack of governing bodies and the exclusion of banks has created a marketplace with very little to no regulation. Little regulation can be good since you can avoid all middlemen and the extra fees and charges that come with that. However, it also creates increased risks and leaves you more vulnerable to problems, which brings us to our next advice.
Be aware of market manipulation and volatility
The cryptocurrency market is known to be highly volatile which creates problematic situations for businesses, especially those that use cryptocurrencies for payments. It’s hard to use a currency that’s constantly changing in value. Also, if you make a profit from a cryptocurrency investment, that profit could be gone overnight which could seriously hurt your company. Although, there is a more concerning issue with the market’s volatility.
Recently, a comprehensive study was published with proof showing that much of last year’s record-breaking prices were created by market manipulation. Not only does that mean that much of the fluctuations were controlled and planned, but it also means that it could take very long before we reach the same prices as we saw last year again.
Market manipulation is a major concern, and you might want to consider waiting to enter the market until the situation has been dealt with accordingly. Then again, you could also benefit from volatility by going both long and short with your investments and for that CFD trading is perfect. Also, there are several options of regulated brokers that offers cryptocurrencies. Using a regulated broker in an unregulated market provides a lot of safety.
You will risk losing it all
We’ve already touched on this subject, but it doesn’t hurt to bring it up again to summarize our advice.
There are some really great benefits of using cryptocurrencies, both as a private person and as a business. As mentioned, cryptocurrencies such as Bitcoin can help take your company to the next level, and it can give you an edge over your competitors. By you using it and encouraging others to do the same, you will help drive the technology forward and at the same time increase awareness for something that will most likely be an important role in the future of our society.
All that being said, there is always a risk that you’ll lose everything you invest, especially at this point in the development. No one really knows where the market is going and even though most agree that the technology won’t disappear, certain assets might. For example, most ICOs that have ever been launched are either losing money or have disappeared completely.
The market is still young, and both the potential reward and the risk is high, so be careful.