The rise of cryptocurrency has led to a rush of investors joining the new and evolving industry as the lure of making quick profits seems difficult to ignore. This has also led some people to think of receiving their salary in Bitcoin, the largest crypto coin based on market capitalisation.
While there’s always a possibility of the valuation rising quickly, the risks associated with a volatile industry need to be analysed first. The rising inflation and interest rates are eating into the middle class’s salaries, so Bitcoin can help beat inflation if the values go up during the time.
But Bitcoin has traded below $45,000 for the most part of the last month, according to CoinMarketCap, a market research agency. At the time of writing this report, it was trading a little above $46,000, which is a significant drop from its all-time high just five months ago. However, financial experts feel Bitcoin will bounce back and pick up value in the coming months.
Bitcoin supporters cite the growing acceptance of cryptocurrency globally, they cite El Salvador, which has adopted it as a legal tender. They also highlight the lower transaction fees and instant transfer features of Bitcoin. But if you are thinking of accepting salary in Bitcoin, you need to consider these points first.
— No major economy has so far given Bitcoin the status of a legal tender. They are exploring mechanisms to launch their own central bank-backed digital coin (CBDC).
— There is also limited use of Bitcoin as a payment method. You can’t buy groceries or pay for services using crypto coins. While some companies are getting warmed up to the idea of accepting payment in Bitcoin, a wide-scale adoption is still far away.
— You can use Bitcoin to buy NFTs, own property in the virtual world and play some online games. Reports have said some food chains and restaurants in the US have decided to accept payments in Bitcoin, but there’s no such proposal in India so far.
— While the Indian government had levied a tax on cryptocurrency transactions, that is the closest it has come to recognise the crypto industry.
— And remember, after all, Bitcoin is a private cryptocurrency without clarity on who created it.