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Author Topic: Bitcoin volatility actually GOOD for business! (with proof)  (Read 1673 times)
hacknoid
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May 02, 2014, 06:10:58 PM
 #1

UPDATE: I updated with a second example as I think the point is not clear.  The larger the volatility, the more the merchant stands to earn when the price swings back toward the average (mean) price.

(I have heard this so many times, but I had a suspicion that this was not entirely true, so I ran some numbers… this is the result.)

Here is the tl/dr: Merchants can actually reduce vulnerability to price drops and earn more for a period of time if they accept Bitcoin for payment directly than if they had used cash and certainly more than if they accepted credit card. Even if they are really lazy and don’t even watch the market price! With a very very simple plan, even in 2014, the merchant would actually come out better than accepting cash.

Even if the price remains constant, the above is true.  In fact, the price can actually slowly decrease over time without the merchant losing out (they would still be ahead).  To say nothing of an increase in exchange price…

This is an important finding.  If anyone wants to replicate the numbers or double-check the spreadsheet please do!


(Note that all the assumptions here are that there is a relatively constant amount of sales using BTC.)

Many critics charge that volatility with Bitcoin prices makes it impossible for a business to actually use it.  They argue that if the price drops by 20% in a day, how can you possibly make money?  However this argument ignores the reality of the situation, which makes it actually more beneficial to the merchant to accept Bitcoin than cash (and certainly credit cards).

First of all, reality is that nobody in their right mind is going to sell bitcoins for cash when the price drops lower than when they received them (unless absolutely necessary).  And in the event that a merchant needs to convert in a short period of time, there are options to use a payment processor.  This post is not directed to those merchants.

The key things to remember from the merchant’s point of view, when they price something in fiat (dollars for example) and then sell for the equivalent amount of BTC, is that the drop in price can actually benefit them.  Looking back at the example of the 20% price drop, that means any bitcoins in their possession before the drop are now worth 20% less.  However, on the flip side, any sales made at the lower price mean 20% more bitcoins are received by the merchant. What happens is that when the prices swings back, the merchant now has 20% more coins from the lower-priced day than if the swing didn’t happen.

Example 1

Let’s take a simple example, that is illustrated in the table below.  This example shows how as the price swings around an average price, when the price returns to the average the merchant is actually in a position to gain more than 100% cash value.  

The merchant prices a widget at $100 or equivalent BTC.  BTC price is $100 per bitcoin on day 1.  On that day, merchant makes one sale, netting 1 BTC. The next day the exchange rate rises to $120 per BTC.  The day after it falls to $80, and finally on day 4 it returns to $100.

Day  BTC Exchange Price  BTC from sale  BTC total  $ equiv total (on that day)  Avg BTC/$ price (to that day)  
1$10011$100.00$100
2$1200.831.83$219.60$110
3$801.253.08$246.40$100
4$10014.08$408.00$100

Clearly if the merchant sold his bitcoins for market value on day 3, he or she would lose money compared to having taken cash or credit card.  However, merchants try to make money any chance they can, so unless there were extreme circumstances the merchant would never sell the coins that day since the expectation is that the price comes back up later.

Sure enough, on day 4 the price swings back to the average for that period ($100 per coin) and by exchanging bitcoins to dollars then the merchant actually makes 102% of what he or she would have if they would have accepted cash.  And considering the fees for credit cards (say 3%), they would actually make about 5% more than if they had used credit cards as the accepted payment method.

Note that over the course of the 4 days the average price remained at $100 per coin, but the volatility actually gave the merchant more dollars in their pocket at the end of the period.

Example 2

This second example illustrates a larger price swing over the same period of time.  Average price remains the same, but now the merchant has even more coins at the end, reducing their need for the price to come back as high as average in order to break even (or make more if it does).

Day  BTC Exchange Price  BTC from sale  BTC total  $ equiv total (on that day)  Avg BTC/$ price (to that day)  
1$10011$100.00$100
2$1400.7141.714$239.96$120
3$601.673.384$203.04$100
4$10014.384$438.00$100

Great, but what about a real life example?

Using the data from Bitstamp, I created a spreadsheet that you can see here: https://docs.google.com/spreadsheets/d/1hPPret8qimdkB7-3SFTH5hXCYaxsuZYe5AIAUqiFyQY/edit?usp=sharing

Some notes:
- This is my working spreadsheet.  Its not the most pretty, but it works.
- prices are the 24-hour (daily) weighted average as reported by bitcoincharts.com
- assuming a regular BTC sales rate of X dollar (equivalent) per day, everyday
- all totals (min,max,avg) are calculated from all numbers (for each day), even though they may span several days. In reality, a merchant would not hit every number, but the average should still be valid
- calculations use a selling price of $10 per item and assume 1 item per day.  The actual price does not matter, as we are using percentages.
- There are two years worth of data
- Calculations do not take into account exchange fees.

The main calculations determine what the equivalent value of the exchanged coins would be if, starting on each given day, the coins for held for X days, then exchanged at the rate given.  The percentages are the percent value of the exchanged coins as compared to having received dollars directly for the sale (excluding all other taxes and fees).  Numbers are calculated for holding between 2 and 30 days (since holding for 1 day is basically selling the coin for the same price as the exchange rate when the item was bought).  In each case, when the coins are held for X days, the exchange rate from day X+1 us used.

Note that due to the calculations of holding for up to 30 days, the latest valid data in the chart is from 31 March 2014.

Without getting into too much detail about some of the things in the spreadsheet, the important use cases are noted on the third sheet of the workbook.  This is shown below.

The reference case (case 1) is using a payment processor and assuming they take basically a 1% cut.  For credit cards the number are about 97% across the board.  In each case the results are shown for the entire 2-year period, just 2014 (which has seen overall a drop in price from around $755 to $454 over the period) and for just the month of March 2014 (most recent data).

Case  Description  Results All time  Results 2014  Results Mar-14  
1Using payment processor (1% fee)99.0%99.0%99.0%
2Credit card97.0%97.0%97.0%
3Fixed conversion every 7 days no matter what102.5%98.1%96.7%
4Convert some time within 30 days (average trader)107.0%95.8%93.7%
5Hold for 7 days, then trade when limit reached (97%)103.8%100.1%99.7%
6Never cash in2249.5%67.7%77.4%

Case 3 is a merchant that cashes their coins in every 7 days without regard to the exchange rate on that day.  This is a merchant that does not want to worry about additional work, but still wants to use bitcoin, and finds it convenient to convert to cash once a week.  As you can see, over all time they enjoy 102.5% revenue as compared to cash.  Even with the volatile and negative market in 2014 they still made out earning 98.1% of what they would have vs. cash (better than credit cards).  And the month of March is just below credit cards, at 96.7%.

Well, clearly there are better days in the 30 day period.  What about trying to pick a day during those 30-days?  Results are shown in case 4, and reflect the average of the prices over the 30-day periods.  Likely someone looking at market prices could do much better, but on average, they still do pretty well.

But how about a better way, that’s still simple for a merchant to do?  Well, extending on the hold-for-7-days idea, case 5 shows the results of having a simple strategy of holding for 7 days and then cashing in as long as the price nets at least 97% of the dollar equivalent (note that if this number is not hit within 30 days, the assumption is cashing in on day 30 no matter what).  In this case, the merchant nets 103.8% over the whole 2 years, and even in 2014 would offset any dips and retain 100.1% of the cash equivalent.  Even for the month of march it would still be 99.7%.

Would a merchant do this?  Some would say its too much work, but clearly the strategy shown in case 5, which is very simple, could be managed by anyone.  And anyone running a company would be trying to optimize wherever they could, so again, with very little work, the returns are significant.  Especially when it comes to credit cards.

Note that simply holding always results in a net loss in value for both 2014 (Q1) and the month of March 2014.

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May 02, 2014, 06:27:35 PM
 #2

It only works because you have picked specific scenarios where it works and there are many more scenarios where it doesn't work.

For example, if you modify your first scenario slightly, the merchant loses money:

Day  BTC Exchange Price  BTC from sale  BTC total  $ equiv total (on that day)  $ volatility gain/loss  
1$10011$100.00$0.00
2$1200.831.83$219.60+$19.60
3$801.253.08$246.40-$53.60
4$801.254.33$346.40-$53.60

In this scenario, the merchant has lost $53.60 due to volatility.

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May 02, 2014, 06:38:53 PM
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It only works because you have picked only scenarios where it works and there are many more scenarios where it doesn't work.

For example, if you modify your first scenario slightly, the merchant loses money:

Day  BTC Exchange Price  BTC from sale  BTC total  $ equiv total (on that day)  
1$10011$100.00
2$1200.831.83$219.60
3$801.253.08$246.40
4$801.254.33$346.40

In this scenario, the merchant has lost $53.60 due to volatility.


True - if the merchant sold on that last day.  However, the point was, and was stated at the beginning, a merchant would have to be either foolish or desperate (or have no choice) in order to sell on a day when the price was lower than the average of the days over which the coins were collected.  In your example, the average price is $90, and selling on that day would result in a loss.

A loss isn't a loss until it is converted to fiat.  

As I stated at the beginning, as long as the price average is stable, the merchant can come out ahead - and in fact, in analyzing two years worth of data - he or she does.

Obviously there are many days in which coins could be sold at a loss.  The whole point is that over periods of time (and in reality), that doesn't have to be the case, as the price swings work in the merchant's favor when the price swings back up.  

EDIT: Also, your example shows that the additional day at the lower price means the rebound now only has to go to about $93 per coin in order for the merchant to exchange back and not lose money.  Additional days at lower prices lower the average price price the merchant needs to see in order to realize no loss (or a gain).

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May 02, 2014, 11:45:41 PM
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In essence, you assume that the exchange rate will rise consistently with occasional small drops and you require the merchant to hold bitcoins rather than restocking inventory whenever the exchange rate has dropped. You require the merchant to speculate on the exchange rate.

No, not at all.  In fact what I am saying is that if the exchange rate remains (on average) the same, but continues to have volatility, the volatility actually results in the merchant having more coins (on average).  All it requires is not selling coins when the price dips well below average.  The more the volatility, the lower the rate the merchant could sell at and still be at least as well off as other alternatives.

But in fact, even if they do sell at low points, it balances out over a short period of time (see the fixed 7-day sale real-life data). 

If someone needs to sell every day or two then they might as well use a payment provider and take the 1% hit.

The fixed 7-day sale example is exactly the case where the merchant does not want to care what the current exchange rate is.

Quote
How about a real life scenario in which a merchant starts selling on December 1, 2013?

Sure.  I updated the spreadsheet with this example.  The numbers here, for the period starting 1 Dec 2013 and ending 31 March 2014:

case 3) Exchanging all coins once a week regardless of the exchange rate: Exactly 97.3% of fiat value (still better than credit card)
case 4) Exchanging within a 30-day window (requires speculation): 97.5% (average)
case 5) Hold for 7 days, then wait until rate reaches at least 97%: 101.2% (average)
case 6) Hold and never sell: 65.9% (average)

Note case 3 is the exact percentage since it's a use case in the spreadsheet; the other numbers are averages, so they will be close, but not necessarily exact.  And it varies with actual number of sales, of course.

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May 03, 2014, 01:41:28 AM
 #5

You should assume the business is not making a profit.  Any margin on the product is used to pay wages, loans and stock.   Cashflow is not that great, any volatility in value costs the business in additional borrowing costs meanwhile.
    Usually a payment service steps in, takes on this rate risk for a percentage cost but since credit cards also have a cost to them then this is a fair comparison.   BTC compares best on global sales?



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May 03, 2014, 03:31:08 AM
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Sounds like OP never ran a business and has no concept of cashflow

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May 03, 2014, 10:44:35 AM
 #7

I have run a business (2 in fact) but the point is not that bitcoin acceptance and hlding would work for all. As I said a couple of times - payment processors are there for a reason.

However, the point is volatility in the price actually helps overcome the potential for (small) price drops, especially over time.

Clearly its not right for all businesses especially with a tight cash flow. However that doesn't apply to all. Even bitpay said some of their customers keep some of the bitcoin without cashing it out.

Bitcoin’s future is still uncertain so no business would depend on this strategy unless they could manage it. All I am saying is the oft-repeated phrase of volatility is bad is not entirely true.

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May 03, 2014, 11:38:46 AM
 #8

Volatility is good for speculants and traders not for Johny in America, neither for John in Deutschland. They are paying their taxes to the speculants, when buying bitcoins. To much truth? Is there an automatic system that the shop owner or privateperson dont pay their tax to the speculant? Not knows yet. Therefor governments prevent the volatility of their currency by their given power of a Central Bank. But the Bitcoin with their volatility is still better as a FIAT with their inflation.

I like your truth much more, its more for the public, what they should know.

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May 03, 2014, 01:48:09 PM
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Your analysis is wrong. While you are right that the rational merchant who accepts Bitcoin will wait for "highs" to sell the Bitcoin for fiat, there is a whole lot more to the story. Bitcoin volatility is bad for business unless the business owner is trying to set aside a very significant amount of the Bitcoin received as payment to capitalize on long-term upward market trends.

The merchant is open to even greater risk by having not only the normal risks associated with running their business, but of also BEING FORCED to play the Bitcoin market unless they want to lose money by accepting Bitcoin.

Buyers are also rational beings too. They will wait for the "highs" in order to purchase the item. This erodes any profit to be made by the seller by selling on "highs." The seller will beed to constantly play a cat and mouse game simply in order to break even. This still happens regardless of whether the Bitcoin price is fixed or pegged to fiat. If the Bitcoin price is fixed at an average Bitcoin/fiat conversion rate, in the end, the seller will always lose. If the Bitcoin price is fixed at higher than an average conversion rate, this can help mitigate losses, but the higher above the average price that it is, the more it will disincentivize buyers from using Bitcoin over fiat. Merchants can also have the price in Bitcoins listed at automatically updated current market conversion rates based on the fiat price of the good. This is pretty much all we see today, at it probably works best to reduce risk to the seller while also not putting people off form using it. However, unless the merchant automatically converts Bitcoin to fiat at that conversion rate at the time of sale, the merchant must still play the market to break even because of buyers buying goods when the value of Bitcoin is more favorable.
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May 04, 2014, 01:03:51 AM
 #10

While you are right that the rational merchant who accepts Bitcoin will wait for "highs" to sell the Bitcoin for fiat,...

Waiting for a high to sell is not rational, it is speculative.

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May 04, 2014, 02:27:40 AM
 #11

While you are right that the rational merchant who accepts Bitcoin will wait for "highs" to sell the Bitcoin for fiat,...

Waiting for a high to sell is not rational, it is speculative.


They aren't mutually exclusive. If I am accepting Bitcoin as payment for goods or services, it would behoove me to try to sell the Bitcoin in regular peaks and not in valleys. Look at the following sentence where I said that they are forced to speculate:

Quote
The merchant is open to even greater risk by having not only the normal risks associated with running their business, but of also BEING FORCED to play the Bitcoin market unless they want to lose money by accepting Bitcoin.
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May 04, 2014, 10:20:55 PM
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This sounds great in theory, but it only works for businesses with enough cash on hand that they can pick and choose when to cash out their bitcoins.  There a lot of businesses that this approach wouldn't work for: coffee shops, for example, probably operate on fairly thin margins.  Maybe corporate chains aren't as bad if they're partially supported by the parent company, but that's not guaranteed to be how it works.

If you're in a business with a fairly tight profit margin and you need to make payroll in a few days or a week, you may be forced to sell off bitcoins at a loss.  A prime example of this would be the last few weeks of December last year: the price of bitcoins dropped from the high in the thousands down several hundred dollars in a matter of weeks.  No business that really wants to stay in business wants to take the chance that they will suddenly have half as much money as they previously had. 

Even now in 2014, your post is invalidated by the fact that the price of bitcoins continues to drop.  It was around $600 a couple months ago, maybe more.  Now it's $438.20, according to Bitstamp.  The volatility of bitcoins is good for only two groups of bitcoin users: investors willing to buy and hold for a long period of time, and day traders.  Day traders can profit off volatility regardless of which direction the price goes, so the volatility is great for them.  As for the investors - well, if you bought bitcoins say, in January of last year, you're still way better off despite the lower price since the beginning of the year since it was around $13 back then.

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May 06, 2014, 02:16:10 PM
 #13

Bitcoin volatility index that Pymnts launched, it may be work for invesments.  See: http://www.pymnts.com/data-research/#.U2jt8oF_tUU

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May 07, 2014, 12:27:11 AM
 #14

This sounds great in theory, but it only works for businesses with enough cash on hand that they can pick and choose when to cash out their bitcoins.  There a lot of businesses that this approach wouldn't work for: coffee shops, for example, probably operate on fairly thin margins.  Maybe corporate chains aren't as bad if they're partially supported by the parent company, but that's not guaranteed to be how it works.

If you're in a business with a fairly tight profit margin and you need to make payroll in a few days or a week, you may be forced to sell off bitcoins at a loss.  A prime example of this would be the last few weeks of December last year: the price of bitcoins dropped from the high in the thousands down several hundred dollars in a matter of weeks.  No business that really wants to stay in business wants to take the chance that they will suddenly have half as much money as they previously had. 

Even now in 2014, your post is invalidated by the fact that the price of bitcoins continues to drop.  It was around $600 a couple months ago, maybe more.  Now it's $438.20, according to Bitstamp.  The volatility of bitcoins is good for only two groups of bitcoin users: investors willing to buy and hold for a long period of time, and day traders.  Day traders can profit off volatility regardless of which direction the price goes, so the volatility is great for them.  As for the investors - well, if you bought bitcoins say, in January of last year, you're still way better off despite the lower price since the beginning of the year since it was around $13 back then.

if they have good credit then can get advance cash through a merchant program, I heard they give you cash in trade for your transactions but who knows by doing that it can really cut into the profits.

twiifm
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May 07, 2014, 04:00:44 AM
 #15

This sounds great in theory, but it only works for businesses with enough cash on hand that they can pick and choose when to cash out their bitcoins.  There a lot of businesses that this approach wouldn't work for: coffee shops, for example, probably operate on fairly thin margins.  Maybe corporate chains aren't as bad if they're partially supported by the parent company, but that's not guaranteed to be how it works.

If you're in a business with a fairly tight profit margin and you need to make payroll in a few days or a week, you may be forced to sell off bitcoins at a loss.  A prime example of this would be the last few weeks of December last year: the price of bitcoins dropped from the high in the thousands down several hundred dollars in a matter of weeks.  No business that really wants to stay in business wants to take the chance that they will suddenly have half as much money as they previously had.  

Even now in 2014, your post is invalidated by the fact that the price of bitcoins continues to drop.  It was around $600 a couple months ago, maybe more.  Now it's $438.20, according to Bitstamp.  The volatility of bitcoins is good for only two groups of bitcoin users: investors willing to buy and hold for a long period of time, and day traders.  Day traders can profit off volatility regardless of which direction the price goes, so the volatility is great for them.  As for the investors - well, if you bought bitcoins say, in January of last year, you're still way better off despite the lower price since the beginning of the year since it was around $13 back then.

if they have good credit then can get advance cash through a merchant program, I heard they give you cash in trade for your transactions but who knows by doing that it can really cut into the profits.

That's called factoring where you get advanced on POs.  But the buyer (PO issuer) needs good credit ratings

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umair127
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May 07, 2014, 08:52:00 PM
 #16

This sounds great in theory, but it only works for businesses with enough cash on hand that they can pick and choose when to cash out their bitcoins.  There a lot of businesses that this approach wouldn't work for: coffee shops, for example, probably operate on fairly thin margins.  Maybe corporate chains aren't as bad if they're partially supported by the parent company, but that's not guaranteed to be how it works.

If you're in a business with a fairly tight profit margin and you need to make payroll in a few days or a week, you may be forced to sell off bitcoins at a loss.  A prime example of this would be the last few weeks of December last year: the price of bitcoins dropped from the high in the thousands down several hundred dollars in a matter of weeks.  No business that really wants to stay in business wants to take the chance that they will suddenly have half as much money as they previously had.  

Even now in 2014, your post is invalidated by the fact that the price of bitcoins continues to drop.  It was around $600 a couple months ago, maybe more.  Now it's $438.20, according to Bitstamp.  The volatility of bitcoins is good for only two groups of bitcoin users: investors willing to buy and hold for a long period of time, and day traders.  Day traders can profit off volatility regardless of which direction the price goes, so the volatility is great for them.  As for the investors - well, if you bought bitcoins say, in January of last year, you're still way better off despite the lower price since the beginning of the year since it was around $13 back then.

if they have good credit then can get advance cash through a merchant program, I heard they give you cash in trade for your transactions but who knows by doing that it can really cut into the profits.

That's called factoring where you get advanced on POs.  But the buyer (PO issuer) needs good credit ratings

yeah I couldnt quite rememeber whats its called but I thought it could help the situation, but like you said it depends on credit rating.  Plus they make money over The Pos charging a fee on each sale you make

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May 07, 2014, 10:39:34 PM
 #17

This sounds great in theory, but it only works for businesses with enough cash on hand that they can pick and choose when to cash out their bitcoins.  There a lot of businesses that this approach wouldn't work for: coffee shops, for example, probably operate on fairly thin margins.  Maybe corporate chains aren't as bad if they're partially supported by the parent company, but that's not guaranteed to be how it works.

If you're in a business with a fairly tight profit margin and you need to make payroll in a few days or a week, you may be forced to sell off bitcoins at a loss.  A prime example of this would be the last few weeks of December last year: the price of bitcoins dropped from the high in the thousands down several hundred dollars in a matter of weeks.  No business that really wants to stay in business wants to take the chance that they will suddenly have half as much money as they previously had.  

Even now in 2014, your post is invalidated by the fact that the price of bitcoins continues to drop.  It was around $600 a couple months ago, maybe more.  Now it's $438.20, according to Bitstamp.  The volatility of bitcoins is good for only two groups of bitcoin users: investors willing to buy and hold for a long period of time, and day traders.  Day traders can profit off volatility regardless of which direction the price goes, so the volatility is great for them.  As for the investors - well, if you bought bitcoins say, in January of last year, you're still way better off despite the lower price since the beginning of the year since it was around $13 back then.

if they have good credit then can get advance cash through a merchant program, I heard they give you cash in trade for your transactions but who knows by doing that it can really cut into the profits.

That's called factoring where you get advanced on POs.  But the buyer (PO issuer) needs good credit ratings

where can you get this factoring service?
Bitornio
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May 08, 2014, 02:34:55 AM
 #18

This concept only works if the merchant is a speculator himself. What if the price doesn't make a recovery?
twiifm
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May 08, 2014, 02:49:15 AM
 #19

This sounds great in theory, but it only works for businesses with enough cash on hand that they can pick and choose when to cash out their bitcoins.  There a lot of businesses that this approach wouldn't work for: coffee shops, for example, probably operate on fairly thin margins.  Maybe corporate chains aren't as bad if they're partially supported by the parent company, but that's not guaranteed to be how it works.

If you're in a business with a fairly tight profit margin and you need to make payroll in a few days or a week, you may be forced to sell off bitcoins at a loss.  A prime example of this would be the last few weeks of December last year: the price of bitcoins dropped from the high in the thousands down several hundred dollars in a matter of weeks.  No business that really wants to stay in business wants to take the chance that they will suddenly have half as much money as they previously had.  

Even now in 2014, your post is invalidated by the fact that the price of bitcoins continues to drop.  It was around $600 a couple months ago, maybe more.  Now it's $438.20, according to Bitstamp.  The volatility of bitcoins is good for only two groups of bitcoin users: investors willing to buy and hold for a long period of time, and day traders.  Day traders can profit off volatility regardless of which direction the price goes, so the volatility is great for them.  As for the investors - well, if you bought bitcoins say, in January of last year, you're still way better off despite the lower price since the beginning of the year since it was around $13 back then.

if they have good credit then can get advance cash through a merchant program, I heard they give you cash in trade for your transactions but who knows by doing that it can really cut into the profits.

That's called factoring where you get advanced on POs.  But the buyer (PO issuer) needs good credit ratings

where can you get this factoring service?

From a factor.  Google factor financing

I made a mistake by saying they advanced you on POs. Its advanced on your Invoices.  Had it backwards

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coinft
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May 10, 2014, 02:34:35 PM
 #20

This concept only works if the merchant is a speculator himself. What if the price doesn't make a recovery?

Being a merchant is being a speculator. When you buy (or produce) stock, you have to believe to be able to sell it with a profit, but that's not guaranteed -- hence speculation. When you accept any currency for payment, you have to believe it keeps its value well enough to be able to restock and pay your other expenses, and to actually be allowed to keep it. This is not guaranteed either, and ranges from inflation and unexpected new taxes to outright disownment (see Cyprus).

There's no principal difference in which currency a merchant accepts. This analysis tries to compare the quantitative difference of being exposed to $ or BTC in the recent past, which of course is a poor indicator for the future.

There are worse flaws than assuming merchants are open to assume risk for a profit here. I think assuming a constant sales value in $ per day, payed in BTC, is a bad assumption. I'd expect BTC holders to prefer to spend on peaks, and pay in $ in valleys, which may undo the cost-averaging effect. Also I'd expect rising BTC sales over time, which will shift more sales to the time in 2014 which has a lesser performance.

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