In early January, if you would have asked Overstock CEO Patrick Byrne when his company would reach $1 million in Bitcoin transactions, his response would not have been “in two months.” Of course, not all businesses could be so lucky, but as one of the largest Bitcoin merchants, Overstock has set the bar high, proving that Bitcoin can help achieve business growth and customer acquisition.
On Tuesday, Overstock.com announced that it surpassed $1 million in purchases using Bitcoin. This news came at an important time, further establishing the company as a leader in the e-commerce space. For many, Overstock and other large retailers gave people a reason to start using Bitcoin. Being able to offer an additional payment method gives merchants the chance to stand out in the crowd. And because individuals within the Bitcoin community enjoy trying new things, most businesses see increases in sales.
For Overstock and other merchants, the real value add comes from the potential to attract additional customers. In January, new and existing Bitcoin users were provided a source to spend their digital cash, a majority of which were new users. According to a company statement, “over 60 percent of sales were from new customers.” Additionally, more than 4,300 consumers made purchases using Bitcoin on Overstock.com in only two months.
What other currency could provide this type of growth?
Bitcoin allows businesses to engage with an expanding market, filled with passionate individuals willing to try virtually anything. For most within the Bitcoin community, Overstock.com was something they had heard of, but never used. When the announcement was made in January, Bitcoiners everywhere wanted to be part of the action. Although Bitcoin consists of less than a percent of the company’s sales, CEO Patrick Byrne is optimistic, stating in an interview that he expects Bitcoin sales to reach up to $15 million by the end of the year.
In addition to growing sales and new customers, Byrne also believes that over time, there will be a derivatives market for Bitcoin that allows commercial end-users like retailers to hedge their risk. This could create and establish a completely different business venture for Overstock, which could cause many other companies to follow suit. In a recent filing with the Securities and Exchange Commission, Overstock stated, “In the future, we expect to transact in Bitcoins directly and intend to hold Bitcoins. This will subject us to exchange risk which may have an adverse effect on our results.”
As one of the first major online retailers to accept the virtual currency, their support for the growth and further adoption of the Bitcoin ecosystem is obvious. Overstock currently holds ten percent of each transaction in Bitcoin, and in the future intends to offer it as payment for vendors and employees.
Overstock.com is a great example of how Bitcoin can revolutionize the way we do business. Bitcoin puts the power back into the hands of the business owner and can play a major role in a company’s growth, further establishing a global marketplace. The implications of virtual currency also give businesses the ability to securely transact with customers around the world. The example set by Overstock and the tens-of-thousands of Bitcoin merchants will assist in forging the path for future adoption of Bitcoin, for both e-commerce and brick-and-mortar businesses. Will Overstock reach $15 million by year’s end, or have they underestimated again?