Reasons to Keep Crypto in Mind for Your Business

While the majority of people have heard of Bitcoin, just 10% of them are aware of how cryptocurrencies function, let alone how they came to be. While you don’t need to be an expert on the technology, understanding how cryptocurrencies might assist your small business is vital. Improved workflows, cheaper operational expenses, decreased fraud, and better confidence among vendors and consumers are just a few of the small company benefits of “cryptos.”

As a reminder, cryptocurrencies were created in 2009 as a direct response of the financial crisis of 2008. Years of dubious advertising and usage of financial products including unfunded credit default swaps, subprime home loans, and mortgage-backed securities contributed significantly to the catastrophe. Traditional banks, investment firms, and financial institutions pushed such assets up and down, crashing the US and global economies.

Hundreds of billions of dollars in bailouts and artificial interest rate resets to zero or less were necessary to avoid a catastrophic economic catastrophe, courtesy of central banks all around the world. Those Herculean efforts were made to keep economies afloat and preserve huge banks that were deemed “too big to fail.”

The focus on protecting Wall Street by policymakers and central bankers over Main Street small enterprises and regular investors demonstrated how government budgetary blunders and botched monetary policies may have major geopolitical consequences. We’d all witnessed it, and none of us wanted it to repeat again.

Following this, an alternate monetary model was developed. It was designed to help individuals and give us a fighting chance against Big Banks and Big Finance’s “smart money” and capital limits.

Following the publishing of a white paper introducing Bitcoin and how it would function, cryptocurrencies arose. Cryptocurrencies, which are built on a tamper-proof blockchain to avoid financial nonsense, offer people financial independence and fiscal equality by trading in wallets such as Exodus Bitcoin Wallet.

Cryptocurrencies have a number of advantages, including the elimination of third-party gatekeepers like as banks, fast settlement transaction times, much decreased transaction costs, and low-friction transfers to any location with an Internet connection. Those crypto advantages can be beneficial to almost any small business.

Despite the volatility of cryptocurrencies, the fundamentals that sustain their use case and value remain unchanged. Take a look at these three macroeconomic trends that aren’t likely to go away anytime soon: Governments are continuing to create money at unprecedented levels.

In February 2020, the US Federal Reserve allowed the US Treasury to accelerate the printing of US dollars. Since then, the entire monetary supply (M2) has risen by 31% to $21 trillion in circulation in less than 18 months. It doesn’t take a Nobel Laureate in Economics to see that when money is created and poured into markets in ever-increasing volumes, the value of each individual dollar diminishes.

Stablecoins like USD Coin and Dai, which are tethered to the US dollar, have stayed stable despite the influx of cash into the market. Right now, your unused stablecoins on a cryptocurrency exchange (a desktop or mobile program for buying and selling digital coins/tokens) may generate annual percentage yields of 4 to 12%, which is a good rate of return for any small business.

Inflation is continuing to rise, and the cost of commodities is rising as well.

June’s inflation rate jumped 5.4 percent, according to the US Bureau of Labor Statistics. That was the greatest year-over-year increase in consumer goods prices since 2008. The Consumer Price Index is sometimes criticized as an incorrect measure of “actual inflation” since it is based on cost changes for a basket of goods and services, yet politicians have altered the composition of that basket at random throughout time. It isn’t a reliable criterion.

Despite these shortcomings, the 5.4 percent rise in June 2021, on top of the 5.0 percent increase in May 2021, is difficult to dismiss. Those figures don’t include the double-digit increases in housing prices, used vehicle costs, and gas prices. You’re on the front lines of inflation as a small firm, with few choices for safety. Bitcoin, on the other hand, is a potential inflationary hedge that can readily be bought or traded in fractional quantities for small firms that may require quick access to liquidity because to its scarcity of only 21 million tokens.