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


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About Gary Le Masson

Gary Le Masson is PrestaShop's in-house SEO guy. When he's not dealing with keywords, you can find him listening to Funk music or digging into some Google Analytics custom reports to explain the meaning of life.

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