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BITCOIN: Why Every Online Store Owner Should Refuse It

The author’s views are entirely his own and may or may not reflect the views of PrestaShop.

Over the weekend, Bitcoin lost a whopping one third of its value. We have all heard the buzz about this “crypto-currency” and I’m sure you’re wondering if using Bitcoin is the right move for your online store. Since we all want our businesses to have a profitable competitive advantage, and Bitcoin seems to be touted as the “next big thing”, let’s dig in and see what Bitcoin can really offer online merchants.

This article is neither about the History of Bitcoin, nor is it about predicting whether Bitcoin will succeed or disappear. This article is simply trying to answer the important question for online store owners: “Should we start accepting Bitcoin now, wait and see, or completely reject it?”

The Problem with Bitcoin’s High Volatility

The high volatility of Bitcoin is the result of two things. The limited supply of Bitcoins available (one of its native characteristics) and the enormous demand caused by the viral buzz generating around it.

Compare this two year Google Trends Chart representing the People searching “Bitcoin” around the world against the two year Bitcoin price evolution in US$. Do you see any correlation?

Google Trends Chart for the keyword “Bitcoin”


Bitcoin / Dollar index according to

These two charts show that the value of Bitcoins is determined by the demand for it. It is not actually a problem for any particular market to be ruled by its demand, but because the demand (or buzz) for Bitcoins violently fluctuate within a week, it dramatically affects its value.

What does this means for your Online Store?

The problem with accepting volatile commodities like Bitcoin on your Online Store is that at the end of the month, you will continue to pay your bills in conventional currencies (US Dollars, Sterling Pounds, Euros, or any other); meaning that Bitcoin’s volatility can jeopardize the profitability of your online business.

- If the Bitcoin value soars, you’re more profitable
- If the Bitcoin value drops, you’re in deficit

Can Bitcoin improve my Conversion rate and Online Store KPIs?

I do not see any reason why your Online Store’s sales performance would improve just because you started accepting Bitcoins.

Is there any “legal” online store that has ever announced that it succeeded because it accepted bitcoins?

In my opinion, the only reason why some companies are announcing that they are going to start accepting Bitcoins is to ride the wave of the current buzz and get backlinks to improve their SEO.

What happens in case of a Bitcoin crack ?

I’m not saying that Bitcoins should or will crack any time soon. That being said, you must consider that a crack could happen and predict what people would do in this situation:

- Let’s say that the worst case scenario happens and the bitcoin drops from approximately 600 to $5 in a day, (as 900 to 600 is possible in less than 7 days)
- People owning some bitcoins will start panicking,
- As soon as they realize that a crack is happening, they will try to change their worthless bitcoins against anything valuable.
- Since the US Dollar vs bitcoin ratio will be so poor, people will start thinking about buying stuff with their bitcoins.
- And of course, these bitcoin owners will spend their bitcoins very quickly , maybe even on your online store.
- For online stores, once a transaction is processed, it’s processed.

Imagine that this online store owner receiving all these orders against worthless Bitcoin is you. Do you still think your online store should accept it?

02/17/2014 – EDITOR’S EDIT

As this article got lots of criticisms regarding the fact that I wasn’t addressing Bitcoin Payment solutions such as Coinbase or Bitpay, I took some time to “do my homework” and research what these Bitcoin Payment Solutions really had to offer merchants.

Bitcoin payment solutions that remove its volatility risk

As CoinBase and Bitpay offer merchants to “instantly” convert earned Bitcoins into Dollars, my previous argument saying that volatility of Bitcoin was the problem for merchants just vanished.
But as commenters below said that Bitcoin was “the money of the future”, and that there were “Zero risks” associated with these two services, I decided to continue take my research a little further since I was still not convinced…

You can accept Bitcoin, but don’t keep them

Online Merchants should accept Bitcoin but must convert their Bitcoins as soon as they earn them. This so called “money of the future” is money that I should not keep? Is this serious?
OK I admit that Coinbase and Bitpay remove the volatility risk with this feature, but what’s the point of accepting Bitcoin if you cannot keep or spend them.
If “Bitcoin defenders” think that this argument from Coinbase and Bitpay will actually help their favorite cryptocurrency to spread, I think this is a big mistake for two reasons:
1) What really makes money is circulation
As I said before, I am not against virtual currencies, but if online store owners accept bitcoins and cannot spend them to make it circulate, Bitcoin, in my opinion, will never spread to the masses since nobody will ever have the opportunity to get their hands on it.
2) Coinbase and Bitpay make “real money” by speculating on Bitcoin
These people offer you to convert earned bitcoins into dollars at almost no fee, their business model is about generating large amounts of bitcoins and making money with it: i.e. Speculating on the Bitcoin market and as a result making it even more volatile.

The funniest part about the Bitcoin Defenders argument: They want to get rid of the speculation from bankers and defend a commodity on which they are speculating themselves. No one on Earth wants to own money that is volatile, this is exactly why many Central Banks fight against inflation.

How can you be sure there are no risks ?

When someone tells me “There is no risk”, I am always suspicious… Especially since the Bitcoin market is 100% unregulated where a simple DDOS attack last week forced Bitstamp to halt customer withdrawals.
And earlier last week, MtGox, considered the biggest Bitcoin exchange platform, blamed developers, and suspended withdrawals as well.
Can anyone be sure that what happened to MtGox and Bitstamp will not happen to Bitpay and Coinbase?

Another interesting event going on last week was the huge difference in the value of Bitcoin Vs Dollar, that appears to vary on different Bitcoin Exchange plateforms : Today MtGox prices 1 Bitcoin for $352, Bitstamp prices it for $632, and btc-e prices it for$619.
How could such variations could be explained?
In conclusion, I still believe that online merchants should not accept Bitcoin.

At the same time, I love debates, so feel free to share your opinion…

My colleague, Natalie Beigel, recently shared a more balanced point of view regarding Bitcoin. Feel free to discover her point of view on Bitcoin and Ecommerce: the pros and cons


  1. Author: snade

    Date: February 10, 2014 at 4:17 pm

    What if the rest of the humanity realize that this new currencies are not regulated by the greedy banks and governments, and the price goes from 600 to 6000 in couple of months? Like it did form ~10 to ~1000.
    You see, at the moment, you’re perfectly correct, nobody will improve their shop overall performance if they start accepting bitcoins.
    But when more shops start accepting the money of the future(I can only hope that our future is not entirely in the hands of banks and governments), the more people will start using and trusting it, and the value will go up and up.
    The buzz around them is not just hoax, this is a whole new era in online payment. REAL peer-to-peer, no banks, no regulations, no taxes, no waiting times, just simple payment transfer from one party to another. Brilliant.

  2. Author: designhaus42

    Date: February 10, 2014 at 5:01 pm

    I personally think bitcoins are a valid currency for e-commerce if precautions are taken. I would recommend daily withdraws and conversions if you are taking bitcoins, because it is a volatile currency.

    One thing bitcoin can do for your shop, that can outweigh the risk is to provide exposure and SEO. It did get in the news a lot when they announced they were going to start accepting them. Which, is the main point for this blog post too. SEO. Accepting bitcoins will help your sites SEO for the time being and drive more traffic. Customers might even choose not to use bitcoins, but find out about your site because of the bitcoin acceptance.

    If it were me, I would take the gamble doing frequent withdraws. In the long run, what do you have to lose?

  3. Author: fmdejouv

    Date: February 10, 2014 at 6:02 pm

    You should not convert bitcoins. The value of bitcoins should be determined by the goods and services you can buy with them, not by how much of the dominant currency you can buy with.

    • Author: designhaus42

      Date: February 11, 2014 at 1:57 am

      Accepting bitcoins is not a long term investment strategy for e-commerce shops. I honestly cannot fathom your thinking on this. Money from products sold is considered operating capitol. If your suppliers do not accept bitcoins then at some point you will have to convert to buy more products. But what if you wait to convert and the price goes down 20%? Then you have taken a 20% hit on profit. But what if you are operating on a 15% margin? Oh, you just lost 5%. Shipping, if you were charging exact shipping costs, you lost even more.

      The moral of the story is with business cash flow, you need to keep it liquid in the fiat that your suppliers accept.

  4. Apparently Gary’s never heard of which allows online retailers to take bitcoin with no risk. Do you think is holding bitcoin over a few seconds?

    Mark Andreassen one of the smartest guys on the planet invested $25M into Coinbase for this very reason, allow online retailers to take bitcoin with 0 risk. Not only that, the transaction will cost the retailer ~2% less than a traditional credit card transaction.

  5. This article really misses the mark for online store owners. If you’re not speculating then Bitcoin’s volatility is a non-issue for merchants. Services like Coinbase and Bitpay allow for a payment to be immediately converted into USD at the time of payment and the online merchant incurs zero risk of loss in value. Its a great way to reach out to under served consumers.

  6. Rebuttal:

    1) Most BTC Services, i.e. Bitpay, you can convert the currency for each transaction right then within minutes so you are getting the value you expect in your local currency within minutes. Why would any business, especially now, hold more than 10% in BTC say as an investment vehicle, with hard costs and cog?

    2) Every major business, even my small business, has seen an increase in sales literally within hours due to the publicity…if you know what you’re doing with the media, and there are many sites that list businesses that accept BTC you can get listed on for free. did $126,000 in 22 hours after introducing they accept BTC.

    3) If BTC gets cracked you have MUCH bigger issues to deal with than the price of BTC. This is a very well known and used cryptography and if hackable or crackable our entire government and banking system would be at risk. SHA256 and ECDSA used in Bitcoin are well-known industry standard algorithms. SHA256 is endorsed and used by our US Government, banks, and other money transfer companies. If you feel these algorithms are untrustworthy then you shouldn’t trust credit cards or any type of electronic bank transfer. Bitcoin has a sound basis in well understood cryptography.

  7. If everyone started owning and transacting in bitcoin and trusting and supporting the developer community, which also developed their fancy ecommerce stores rather than the dollar which bailed out the bankers when they lost enough money to go bankrupt, or simply paid fines when caught money laundering, or when caught manipulating currency rates, or, or, or, then perhaps this economy will be a truthful one again.

    In the meantime just bitpay’s direct to fiat into your bank account in USD immediately until the price stabilizes. Remember bitcoin is still where Mozilla or Netscape was when the internet started. Ecommerce wasn’t even around then.

    Have a little faith peeps!

  8. Author: Scott

    Date: February 10, 2014 at 9:33 pm

    The problem with this, is that it doesn’t account for what Coinbase offers.

    Coinbase will sell your bitcoins immediately for USD, based on the value at the time of the transaction.

    There will be a “worry about end of the month” because the transactions are converted within 24 hours, and by contact, without changing value.

  9. Author: Christophe

    Date: February 11, 2014 at 2:09 am

    I’m surprised you didn’t stumble upon either Coinbase or BitPay when researching your article.

    They are but a few of the companies providing merchant services to make it easier to accept bitcoin payments:

    - They let you price all your products in whatever local currency you want to use. They’ll automatically generate an invoice in bitcoin and convert it to your local currency, with no conversion risk. You say the user pays $20, you get $20, period.
    - They’ll credit your bank account directly at the end of each business day.
    - Fees are 1% (Coinbase has 0% fees for the 1st million dollars in bitcoin sales).
    - No chargebacks.

    If you use one of these service providers, you can treat bitcoin like a better, cheaper credit card, and let someone else handle all the risk.

  10. Author: Jeff thompson

    Date: February 11, 2014 at 2:21 am

    Wow, this is a really shortsighted and misinformed piece. Providers like Bitpay insulate you from the fluctuations. Bitcoin is like the Internet was early on – people were confused and said “Why would we do that? I get my orders on the fax machine just fine!”

  11. Use BitPay and stop worrying.
    You can keep all your sales in $ inmediately.

    If volatility worries you, there are solutions.


  12. Whoever wrote this article, you don’t understand how services like Bitpay and Coinbase work. Everyone should accept Bitcoin.

  13. Author: Chris

    Date: February 11, 2014 at 7:31 pm

    Where to begin, as an investment method Bitcoins are probably as close to penny stocks as any other investment asset out there, purely speculative, no regulation whatsoever and extremely volatile.

    But this is not the point here, the main risk when engaging into international transaction (accepting payments in another currency than your home i.e. USD) is foreign exchange risks. This basic financial theory alerts business owner that accepting other regulated currencies such as the Euro, Pound, Yen and so forth puts your profitability at risk due to the volatility of foreign exchange markets. Bare in mind that volatility between major currencies is in single digit percentage, for example the Euro USD as fluctuated between 1.27 and 1.38 against the Dollar over 2013 which represents an 8.6% volatility. This risk is exactly what accepting Bitcoins is, except that you are facing not only much higher volatility as expressed in the this article but also any crack down from Governmental agencies, regulators (SEC, FSA …) and also from major financial institutions.

    The reason why financial transactions occur in USD, EUR or GBP is because they are regulated, it is the highest level of trust one can have on traded commodity. Using Bitcoins is the polar opposite, you are not only facing a commodity that is volatile but also one that is not being traded in large enough volumes so that it can be trusted. Finally, you are also facing the risk that your Bitcoin operator will stop from its operations, Business insider expresses it better than I do:

    Simply put, I would simply wait and see, the risk far outweighs any incremental SEO push accepting Bitcoins might result in.

  14. Author: Gordon

    Date: February 13, 2014 at 3:08 pm

    Basically, you have done no research before writing this article and you have no clue what you are writing about.

    Services like Bitpay/Coinbase mean accepting Bitcoin is a no-brainer. There are no downsides. You don’t even need to go through background checks.

  15. what’s the point of accepting Bitcoin if you cannot keep or spend them

    Forget all this investing & price talk. For merchants Bitcoin can be looked at as simply a protocol for sending money over the internet. Cheaper than Paypal or a Credit Card, and without borders.

  16. Author: Nhon

    Date: March 24, 2014 at 2:21 am

    Hi Gary,

    I read your article, and I cringed a lot on most of your points. Let me break it down:
    1. RE: The Problem with Bitcoin’s High Volatility
    Online stores can convert bitcoins to their local currency instantly, therefore this reasoning of yours is gone. For example, if the online store pays all their Suppliers in USD, of course they need to convert all their payments to USD to pay. IF all their Suppliers wanted to be paid in AUD, same deal applies. If for instant, all their Suppliers wanted to be paid in bitcoins, then they do not need to convert. So its all respective of what their Suppliers wants to be paid in, they convert it to that currency. This is why I accept AUD and you accept USD. If for example when the market for bitcoin is big enough, more and more people will stop requiring to convert out of bitcoin (eg, Tigerdirect etc etc is accepting bitcoin…so its getting there slowly).

    That was your reasoning behind your article, and it has ALREADY SOLVED your article’s problem. You need to admit it and not add more points after your article against accepting other forms of currency.

    However, since you mentioned more points, I will continue.

    2. RE: You can accept Bitcoin, but don’t keep them
    I covered this in 1. Yes thats right. The online store only keep what their Suppliers want to accept. If their Suppliers want to accept bitcoins, they keep that and pay them with it. If they want USD, AUD etc, they will convert it.
    Using companies like Coinbase and Bitpay – when the online stores convert their bitcoin to say USD, where do you think those bitcoins go? Those companies resell it to people. These people will buy those bitcoins and then do what they want with it. They trade with it, they use it to purchase to Online Stores etc etc.

    3. RE: How can you be sure there are no risks ?
    Read the Bitcoin whitepaper by Satoshi Nakamoto –
    It never stated that bitcoin has no risk. Bitcoin’s main purpose is in the introduction, which states
    “…What is needed is an electronic payment system based on cryptographic proof instead of trust,
    allowing any two willing parties to transact directly with each other without the need for a trusted
    third party. Transactions that are computationally impractical to reverse would protect sellers
    from fraud, and routine escrow mechanisms could easily be implemented to protect buyers…”
    Another words, its main purpose to remove the “Trust Factor” and let Online Stores (Merchants) to accept bitcoins without the risk of fraud (chargebacks) and can protect Buyers with an Escrow system.

    Thats its main purpose. Let Merchants accept a currency that does not require trust, has no charge backs (cant be reversed), has an escrow system to protect Buyers, prevents double spending etc etc.

    (I havnt even mentioned the savings of fees from Banks, Foreign Exchange rates and credit card savings, plus the speed for international payments too – but thats just a side benefit…and also that Government cannot print bitcoins like they are doing with the USD now, thereby reducing your money buying power of the USD).

    I hope you can read my comments and understand what Bitcoin and bitcoin is, and start helping with good articles for Online stores to accept digital currencies like bitcoins and help them with security and smart methods of converting all the different currencies.

  17. Pingback: O que espera do futuro do Bitcoin no e-commerce? - É isso mesmo, Produção? | É isso mesmo, Produção?

  18. Author: milesdevelopment

    Date: April 9, 2014 at 10:37 pm

    were is a module for a payment gateway for coinbase?

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