Would you consider selling your products or services for Bitcoin or cryptocurrencies today? You could accept Bitcoin payments for them quite easily now.
Many people are getting on the bandwagon as companies like Fidelity and Robinhood make it easier to exchange dollars for bitcoin and invest in them with their apps. Moreover, it’s very easy and quick to do today!
Could Your Company Profit from Bitcoin Purchases?
Tesla bought $1.5 billion worth of bitcoin a few years ago. That was quite an investment.
You can now buy a Tesla with Bitcoin— Elon Musk (@elonmusk) March 24, 2021
Tesla will be starting to accept the payments in the 2nd half of 2021 but not in the United States (yet.) And then they backed out of accepting it on May 13th.
Tesla & Bitcoin pic.twitter.com/YSswJmVZhP— Elon Musk (@elonmusk) May 12, 2021
But hang on! On June 14th, he announced they will be accepting Bitcoin once again for Tesla purchases once energy usage becomes clean. Not only that but Tesla does accept Dogecoin as well.
This is inaccurate. Tesla only sold ~10% of holdings to confirm BTC could be liquidated easily without moving market.— Elon Musk (@elonmusk) June 13, 2021
When there’s confirmation of reasonable (~50%) clean energy usage by miners with positive future trend, Tesla will resume allowing Bitcoin transactions.
Many people are getting on the bandwagon as companies like Fidelity and Robinhood make it easier to exchange dollars for bitcoin and invest in them with their apps. #bitcoin Click To Tweet
What About Sales Taxes with Bitcoin Sales?
Purchasing one of the electric cars with bitcoin could end up being more expensive than buying in cash or on credit, depending on when a customer first acquired their share of the cryptocurrency.
However, that’s because the Internal Revenue Service sees spending bitcoin — or even converting it back to US dollars — as a realization of investment gains. Therefore it is subject to the capital gains tax. It’s not unlike selling a stock or bond.
Lastly, think about doing your taxes. Imagine how complicated it can get when you start accepting Bitcoin.
That is something to consider and discuss with your accountant before your jump on the crypto bandwagon.Therefore it is subject to the capital gains tax. It's not unlike selling a stock or bond. #bitcoin Click To Tweet
People Have Bought Houses with Bitcoin Payments
In the past several years some real estate companies have allowed bitcoin as payment for a home. Now, 14.3 Homes per 100,000 Accept Cryptocurrency for payment.
What is the upside?
Transactions are more direct and can be completed in minutes or days, rather than the traditional closing period of weeks or months. Imagine being able to move faster into that new home.
What is the downside?
Capital gains tax can apply. And, of course, with the wild oscillations of the crypto market, the currency is still a risky bet. The bitcoin prices go up and down fast and around the clock!
You can check out some homes here that accept Bitcoin for payment of homes.
Jim Cramer Paid off His Mortgage with Bitcoin
Imagine paying off your mortgage with Bitcoin. CNBC’s host Jim Cramer did that. Now if you read the fine print you will learn he invested $500,000 in bitcoin to start with!
Afterward, he also purchased a Hummer vehicle with his bitcoin earnings.
Now if you don’t have money to invest you could shop online with Lolli and earn some bitcoin to get started as I had.
However, please be careful NOT to get addicted as it could be similar to gambling for some people.
How to Have Your Products or Services for Bitcoin Payments
Today there are more choices for people to pay for their products or service with bitcoin.
These are the processors you can use to collect payments with cryptocurrency. Now that Paypal is accepting bitcoins, I believe it will make it easier for many small businesses to also accept the exchange.
- BitPay. One of the largest companies in the world enabling businesses to accept cryptocurrencies as payment.
- CoinBase Commerce.
Services for Bitcoin Like Etsy Have Bitcoin Payment Options
Now if you are selling online via Etsy or Shopify you have bitcoin integration available. Business owners can also sign up on Coinbase Commerce and other payment processors directly.
Such payment processors are free to set up and allow merchants to directly accept crypto payments from customers anywhere in the world.
But beware as bitcoin transactions are also irreversible, which means both the customer and merchant must have a great deal of trust in each other. Transactions can be refunded only by the party receiving the funds.
Businesses that accept Bitcoin should be prepared for the possibility of customers requesting refunds, and keep track of how much money each customer has paid.Transactions can be refunded only by the party receiving the funds. #bitcoins Click To Tweet
Will Bitcoin Grow Your Business with Services for Bitcoin?
That’s the bottom line for you, right? Could bitcoin help you to grow your business in the coming years? If more and more people are using it then the answer would be YES.
Just be aware of the capital gains taxes and if they go up as planned it could be something to really think about.
Business selling their Bitcoin needs to keep track of its value the day it was received and the day it was sold, and also factor in other variables that can adjust the total amount owed. For small businesses dealing with several transactions a day, that can get very complicated and time-consuming.
A general rule is that small business should accept crypto only for big-ticket, luxury purchases rather than smaller, more frequent ones.
Will You Consider Selling Your Services for Bitcoin?
I’d love to know more in the comments below if you would accept bitcoin for your services or products today or in the near future.
However, I also hope that this blog post has made you more aware of ways to use cryptocurrency today and a little bit about how it can work for you and your small business.
2 thoughts on “Selling Your Products or Services for Bitcoin”
This is an interesting article Lisa. I wonder if the tax laws in Canada are the same and you need to pay capital gains? That could make things very difficult to track if you are dealing with several transactions like you mentioned. From an investment standpoint though if you wanted to use it as say retirement income the capital gains tax rate is considerably lower than the income tax rate (at least in Canada) so you would be paying less tax than pulling money out of an RRSP.
The problem I have is the conversion from bitcoin to dollars. If someone said to me give me X amount of bitcoin for this, unless a dollar value is also provided, how do you know how much value the bitcoin amount actually has?
I find the crypto stuff so confusing but I don’t think it is going away so better to embrace it I guess.
Hi SharlaAnn, thank you. I’m not sure about the Canadian tax laws. Very interesting on the Bitcoin to dollar conversion. I’ll have to do some more research on these questions and do a follow-up post. Thank you for the questions and ideas SharlaAnn!