As Bitcoin is cruising through the $18.000 levels, a large array of crypto payment systems are exploring its money-making potential not only as an investment but also as a business opportunity. People buy Bitcoin, and they tend to do so frantically when the market turns green.
Here’s what’s even more interesting – when popular payment systems choose to add cryptocurrencies as a payment option, Bitcoin is exposed to hundreds of millions of users. And by doing so, the market naturally grows even greener. Eventually, that can lead to a growth of bitcoin and other crypto coins usage on applications and websites.
Payment systems are already dipping their toes into BTC
Many payment systems are already experimenting with the addition of Bitcoin investment opportunities directly through their platforms.
- Skrill – Popular payment system Skrill was one of the first payment systems to accept direct Bitcoin purchases through their platform. The good thing is that you buy actual BTC, which you can transfer to any wallet you choose to. The bad thing is that they charge a whopping 10% in fees for the transaction.
- Neteller – Shortly after Skrill enabled cryptocurrency transactions, Neteller followed suit. The platform is more cost-efficient compared to the previous option. It charges 1.5% – 3% for each transaction made on the platform.
- Paypal – Paypal was the latest to join the party, and many investors got excited about their change of mind. Being one of the most popular payment systems globally, the platform now makes it easy for 350+ million users to buy Bitcoin. The catch? There is a 3.75% fee per transaction and you cannot transfer the coins out of your wallet. You therefore never really own the coins, but rather get a virtual representation of them.
- Revolut – Being one of the most popular ways for new investors to purchase BTC, Revolut is quite “sneaky” in its approach. The popular platform only charges 1.5% when you buy Bitcoin which is lower than most payment systems charge. However, there is a catch. You cannot transfer your funds outside your Revolut wallet and. Instead, when you choose to sell your coins, you will be charged 5% in transaction fees.
- Cash App – Cash App makes it easy for US residents to purchase Bitcoin, and even use investment strategies like Dollar Cost Averaging (DCA). The app charges two types of fees which you can explore in more detail here.
Other payment systems enter the cryptocurrency market as well
While several payment systems enable support for crypto payments and deposits, others choose to take a different approach. Payment provider Square is one such example. The company invested $50 million of its cash reserves in order to purchase 4709 Bitcoin.
The move came shortly after Microstrategy and its founder Michael Saylor started the institutional transition from FIAT into the popular cryptocurrency. Here is what Square’s founder, Jack Dorsey, had to say about this:
More important than Square investing $50mm in #Bitcoin is sharing how we did it (so others can do the same): https://t.co/35ABYHuz4f
— jack (@jack) October 8, 2020
All payment systems, which do not allow their users to transfer BTC from their account’s wallet are required to purchase an amount of BTC that reflects the amount their users hold. So for them, as well as other companies who see Bitcoin as a long term opportunity to hedge against risk, the tweet above can come in real handy.
What to expect in the future
Over the past two years, we saw a large effort to whitelist as many cryptocurrency addresses as possible. The reason is simple – once you know the public key tied to a certain account, Bitcoin’s pseudo anonymity is no longer valid. Through this, governments and financial institutions will be able to track the holdings of nearly every user and make sure that everyone is paying their taxes as they should.
However, those that are more experienced in the markets already know about this and choose not to engage in such practices. Instead, they choose to store their coins in hardware wallets, or even non-custodial desktop wallets, storing their funds offline and away from prying eyes. By doing so, they maintain their anonymity and are able to use their money as they like. In the end, if you have purchased your BTC in a legal way, you shouldn’t worry. Even if institutions can track your BTC, it is still the best performing asset in the last decade.
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