Before Bitcoin prices reached 5 digits, many people, freelancers mostly, were already getting paid in bitcoin. But now that prices have reached all- time highs, people are thinking of joining the fray and getting paid for their services or products, not in fiat currency, but in bitcoins. The big question is, is it worth it?
The Volatility of Bitcoin and Its Impact on Earnings
One of the primary concerns that people have about accepting Bitcoin payments is the cryptocurrency's volatility. The value of Bitcoin can fluctuate dramatically within minutes, which can be unsettling for those who have invested a significant amount of time and effort into their work. If you decide to hold onto your Bitcoin instead of exchanging it for your local currency at a cryptocurrency exchange, you may experience a significant loss in value.
For example, in December 2017, the price of Bitcoin reached an all-time high of nearly $20,000. However, by December 2018, the price had plummeted to around $3,200. This means that if you had received Bitcoin equivalent to your salary of $5,000 in December 2017, and held onto it until December 2018, your Bitcoin would have been worth less than $1,000.
The Potential Upside of Holding Bitcoin
Imagine this second scenario though: what if you held on to your bitcoins and the price suddenly jumped to twice the original price? Then you’d feel like you’ve won the jackpot, right? Because you’re essentially going to get paid at twice your rate! If the bitcoin you’ve received is equivalent to, say, for example, your salary of $5,000, with bitcoin prices going up twice the original amount, then you just got paid $10,000! That’s pretty exciting, to say the least.
The Decision to Get Paid in Bitcoin is Yours
The decision to get paid in bitcoin is, of course, yours alone. But there are so many positive benefits to this cryptocurrency you should at least look at the bright side before you say no to an employer or client who’s thinking of switching you over to bitcoin payments.
The Advantages of Fast and Cheap Bitcoin Payments
Bitcoin payments are fast and cheap. You no longer have to wait days for payment to arrive at your bank and you don’t need to pay those hefty bank fees your bank charges you for withdrawing your money. You can receive bitcoin payments any time of the day, and you’ll usually receive it within 10- 45 minutes.
A Balanced Approach to Holding and Exchanging Bitcoin
If you are concerned about the volatility of Bitcoin, you may want to consider holding onto a small portion of your earnings, perhaps 5% to 10%, and exchanging the rest for your local currency. This approach allows you to take advantage of any potential increases in the value of Bitcoin while minimizing the risk of significant losses.
For example, if you receive $5,000 worth of Bitcoin, you could hold onto $500 worth of Bitcoin and exchange the remaining $4,500 for your local currency. This way, you can benefit from any potential increase in the value of Bitcoin while still receiving a significant portion of your earnings in a more stable currency.
Subtitle: Conclusion: Weighing the Risks and Rewards of Bitcoin Payments
In conclusion, the decision to receive payment in Bitcoin for your services or products is a complex one that requires careful consideration of both the potential benefits and risks. While there are undoubtedly risks associated with the volatility of Bitcoin, there are also potential rewards to be gained. Ultimately, it is up to each individual to weigh these factors and decide what is best for them.
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