top of page

Bitcoin and your Business

Opere Suo Helpdesk
Q: What actually would be the business impact by Bitcoin?

A:

Overstock was one of the first business to accept bitcoin (Market Cap of 1.18T today) and is connected to a subsidiary called Medici Ventures. Overstock is such a great example because it started transactions with bitcoin early on in 2014 and we can find several news articles as well as SEC filings as listed below:




"The refund will be issued for the full USD value of the order and processed at the Bitcoin exchange rate when the refund is completed."


"The company has a cryptocurrency unit called tZERO as well as a subsidiary named Medici Ventures that invests in blockchain companies."


"Our decision to accept and hold cryptocurrency, such as bitcoin, may subject us to exchange risk and additional tax and regulatory requirements."

As you can see, consumers purchase and return products same way as a foreign consumers would do, at the exchange rate for USD and BTC at the time of transaction.

And here is Overstock's 10-K quotes on risk:


"Our decision to accept and hold cryptocurrency, such as bitcoin, may subject us to exchange risk and additional tax and regulatory requirements.

In 2014, we began accepting bitcoin as a form of payment for purchases on our website. Neither bitcoin nor any of the other cryptocurrencies we may hold are considered legal tender or backed by any government, and bitcoin and other cryptocurrencies we may hold have experienced price volatility, technological glitches and various law enforcement and regulatory interventions. The use of cryptocurrency such as bitcoin has been prohibited or effectively prohibited in some countries. If we fail to comply with regulations or prohibitions applicable to us, we could face regulatory or other enforcement actions and potential fines and other consequences. Our Board of Directors has authorized us to retain, in bitcoin, up to 50% of our sales revenues paid for by customers in bitcoin. From time to time we hold bitcoin and other cryptocurrencies directly, and we have exchange rate risk on the amounts we hold as well as the risks that regulatory or other developments may adversely affect the value of the cryptocurrencies we hold. We may choose not to hedge or may be unable to fully hedge our exposure to cryptocurrencies and may at times be unable to convert cryptocurrencies to U.S. dollars. If any regulatory authority asserts that we require a license or other regulatory approval to conduct business or own an interest in other businesses involving cryptocurrencies, it could have a material adverse effect on our financial results and business."


"The trading prices of our securities may be affected by the prices of cryptocurrencies, particularly bitcoin, which may be the result of an apparent misperception that the value of our business is related to the value of bitcoin, despite our disclosures that we generally hold very little bitcoin. The market price of our securities may also be affected by perceptions regarding the business prospects of our Medici business and blockchain technology generally. To the extent that our blockchain initiatives do not succeed in a timely manner or at all, or the development or acceptance of blockchain networks, blockchain assets or blockchain applications slows or stops, the trading prices of our securities could decrease significantly, which in turn could adversely affect our ability to raise capital and could have a material adverse effect on our financial results, business and prospects."


Overstock was in early before the general public accepted Bitcoin as a currency or investment they'd consider. In 2014, there were few large hacks such as Mt. Gox hack resulting in 400M dollars lost as well as its usage in the black markets such as Silk Road. And Jamie Dimon, CEO of JP Morgan Chase then quoted "It's a terrible store of value."


However, times have changed and so did the general perception. A movie theater chain, AMC, is now accepting bitcoin and dogecoin for purchasing movie tickets and gift cards as well as well known companies such as Starbucks and Wholefoods.


Cryptocurrency is currently considered to be an intangible asset that is recorded at cost, and impairment of the asset cost must be recorded.

https://www.forbes.com/sites/shehanchandrasekera/2020/05/21/how-are-cryptocurrencies-classified-in-gaap-financials/?sh=56fb73c065b2


As cryptocurrencies grow in market cap as well as popularity and usage, one can assume more changes for GAPP will soon take place as well as risk management procedures. Coins such as SHIB and DOGE may become more popular for day-to-day transactions as they have gained popularity by many in the recent years, already in wallets as they were not tradable on main broker exchanges even few months back, and considered more of a shorter-term investment than Bitcoin or Ethereum.


To read more about Overstock tZero Crypto:



As the popularity and volume grow, we expect more defined accounting rules to be developed. Please refer to following resources:




www.twitter.com/ceoadam




Daily chart return comparison for BTC/USD (Bitcoin) to SPX (S&P 500) and DXY (Dollar Index). as of 11/7/2021, author's customized chart on Tradingview www.tradingview.com

Recent Posts

See All

Comments


CONTACT
LOCATION
MEETING HOURS

Email: ask@operesuo.com
Phone: +1 323-920-9251

Mail: P.O. Box 27716 

Los Angeles, CA 90027

Opere Suo Group
555 West Fifth Street, 35th Floor

Los Angeles, CA 90013

(Between S Grand Ave. & S Olive St.)

Mon - Fri: 8am - 8pm

​​Saturday: 8am - 1pm*

​Sunday: Closed

*Virtual or in-person by appointment only

© 2023 by Operesuo Group. All rights reserved. Privacy Policy.

bottom of page