How to Use Cryptocurrency For Your Business

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Cryptocurrency BusinessNowadays, cryptocurrency is considered one of the mainstream forms of investment in the market. A survey shows that about 23% of adult Americans have personally invested in crypto. And because of its increased demand and utilization, business owners are now wondering how they can incorporate cryptocurrency into their business.

And we can’t blame them because as crypto gains more traction, it’s not surprising to know that it could improve numerous aspects of your organization.

Different Ways Your Business Can Use Cryptocurrency

Utilize A No-Risk Credit Card For Crypto Rewards

If you’re unsure whether to incorporate crypto into your business or invest in it, you may try crypto rewards credit card. It’s a great starting point that allows business owners like you to leverage your personal or business spending, accumulating crypto or points. And at the end of the day, you can convert the points into cryptocurrency.

And because there are certain card variations, you should look for ones without additional annual fees. It will help you earn an unlimited 1% in crypto for every purchase – and maybe even more. It’s a convenient and risk-free option to incorporate crypto into your business slowly.

Accept Crypto As A Mode Of Payment

Although it’s pretty controversial, there are certain benefits to accepting crypto as a mode of payment in your business. Both you and your customers will enjoy secure transactions and significantly lower fees. Because, unlike traditional card payments, which usually costs 2% to 4% per transaction, crypto payment can reduce it to less than 1%.

In addition, your business won’t be charged back, unlike credit card payments. And because there isn’t any third-party involved, crypto payments are final. As a result, your business will enjoy the benefits of being protected by the blockchain, ensuring safe and secure transactions.

And did you know that accepting crypto as payment will help you reach international customers? With this, your products and services will reach a new target market. It could ultimately lead to a business expansion and higher business revenue.

Accepting crypto is relatively simple – you may receive it using a crypto wallet using payment gateways like Paypal or invest in a crypto payment service like Coinbase Commerce.

Invest Using A Retirement Account

One of the most clever ways to trade crypto without triggering capital gains is investing in it using a tax-advantaged retirement account. Some common accounts include Individual Retirement Account (IRA) and Simplified Employee Pension (SEP-IRA).

By using a traditional IRA, all your contributions will remain tax-deductible, and you’ll pay ordinary income tax on money withdrawn in retirement. And don’t worry because although contributions to a crypto IRA are taxable, future withdrawals are tax-free during retirement.

Finance Your Business With A Crypto Loan

It’s no secret that one of the most significant challenges of running a business is a lack of financial access. So if you’re looking for a safe and effective way to get extra funds, you might want to check out crypto lending. To get a crypto loan, you must own some assets while maintaining a specific loan-to-value ratio. And instead of selling all your crypto coins, you can use them as collateral to generate cash or a stablecoin.

Of course, your final loan amount will depend on how much crypto collateral you can provide. For example, you can use $20,000 worth of crypto with a 60% LTV. This will give you a $12,000 cost loan. However, it’s important to note that crypto loans pose potential risks just like other financial services. For example, if your collateral’s value decreases due to price volatility, you might be required to increase it or pay some portions of the loan. And if you can’t comply with the lender’s requirement, they could take a portion or all of your collateral as payment.

With this in mind, you must do proper research before applying for a crypto loan. Make sure to find a lender with a great reputation and excellent reviews. And by now, you should know to steer clear of lenders with messy track records, such as:

  • Taking legal actions against their customers
  • Suspending services without adequate notice
  • Not complying with necessary crypto regulations

Grow Investments Using A Health Savings Account

Your business will thank you if you start growing your investments using a health savings account. Doing so will pave the way for the following tax perks:

  • Tax-free investment growth
  • Tax-deductible contributions
  • Tax-free withdrawals (in the event that you spend them on pre-approved health expenses).

Although it’s usually not allowed to invest HSA balance in crypto, most self-directed accounts like Directed IRA allow it. But to qualify for it, you must be enrolled in an HSA-eligible health plan. For 2022, you’re allowed to contribute up to $3,650 up to $7,300. And for those ages 55 and up, you may contribute an additional $1,000 annually.

Final Words

As cryptocurrency reaches new depths, it’s starting to offer a multitude of opportunities that business owners may use to their benefit. So if you’re looking for ways to dip your feet into crypto, the list above will help you slowly navigate the platform. Then, you may use it to your advantage and grow your assets together with your business.

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