The Next Stage In Bitcoin: Small Business?
Microstrategy opened Pandora's Box. That one company made it fashionable for companies to use part of their reserve funds to buy Bitcoin. Obviously, being one of the early adopters of this trend, it works out very well for that company.
Tesla was also a major milestone since it really helped to bring the tech world into the equation. Before, we saw a lot of finance and FinTech companies. Tesla's $1.5 billion purchase, at present prices, is looking very strong. Rough calculation has them up over a billion dollars, in under 3 months.
Not a bad ROI.
However, is Bitcoin just a game for the large and well funded? The companies everyone is talking about are basically household names. Right now, everyone is watching to see who is next. Will it be Apple? Netflix? Amazon? A bank?
Nobody knows for sure.
What if there was another target market that this same concept could apply to? Instead of just dealing with the largest companies in the world, what about small businesses, at least the ones that are still around? Could they be served by what is taking place?
While the numbers will be much smaller, and will not get too much publicity, the total number of businesses could mean this adds up to a large amount of buying.
One small business that did make it into the news is a pizzeria in Alabama. Sam & Greg’s Pizzeria/Gelateria were motivated by Michael Saylor's endorsement of Bitcoin, that they were moved to shift $200K from their reserves into BTC.
According to the owner, here is what prompted the decision:
“So, why bitcoin for my business? The simple answer is that I have worked hard to save money, and I don’t like seeing it disrespected and devalued. I also do not appreciate politicians and central banks reducing the value of the American worker to the speed of a printer. Bitcoin solves these problems.
The simple forces of a fixed supply and unlimited demand are in play, making bitcoin the obvious choice as the go-to store of value for those simply needing a place to preserve capital, no matter what size business.
The return since the purchase of Bitcoin started: 350%.
This could be considered a great way to stabilize a business.
So might this be the next wave of Bitcoin buyers? Everyone is looking for the big fish yet a lot of minnows can add up over time. If 100,000 small to medium-sized businesses do something similar as to what this pizzeria did, we could see another wave of buyers for Bitcoin.
We are seeing Bitcoin assuming the role as a foundation for many balance sheets. Of course, this is all exciting when the price goes up. Yet what happens when it goes down? As we know, Bitcoin can be extremely volatile. It is subject to large, prolonged pullbacks.
Certainly, this has the potential to affect the balance sheet negatively.
While this is true, the key is this is reserve funding. Thus, it is last resort money. Companies that are in jeopardy of not meeting the payroll next week probably should not be looking at this approach.
For those who still have solid revenues and profits, this could be a great way to divert some of the funds for greater returns. In the event of a pullback, there should be other reserves available to tap into. Nobody is saying allocate 100% of your balance sheet funds to Bitcoin.
This approach will allow one to weather the inevitable Bitcoin pullback storm. At the same time, the upside could be truly monumental. We see a great deal of upside potential meaning that the 350% return could just be the beginning.
Does this help to stabilize a company?
It certainly cannot hurt.
Cryptocurrency is offering the opportunity for life changing money. That is a phrase that is subjective in nature, varying based upon the individual. Nevertheless, for a small business to amass hundreds of thousands of dollars in a year from their reserve fund, that has to put their business, and the owner's balance sheet, on much firmer footing.
Ironic that the first small business to make news about a Bitcoin purchase deals with pizza. There seems some quantum connection between Bitcoin and one of the most popular foods.
If you will recall, pizza was the first known product that was purchased with Bitcoin. An individual was able to buy 2 pizzas for 10,000 Bitcoin. Yes, hindsight is always 20/20. Today, you could probably buy a number of Papa Johns franchises for that money.
Whatever the connection, there is one family who owns a pizzeria who is very happy to be involved in Bitcoin.
Which brings up the question of whether people can buy their pizzas using Bitcoin?
We might just have to wait some time on that one.
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