Fee, volatility, tax… “Other companies will not continue to invest”
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As Tesla, a US electric vehicle company, announced that it will invest in bitcoin and add bitcoin as a vehicle payment method, interest is increasing whether bitcoin will become a new currency.
However, there is a reason why Bitcoin has not been able to leap as a payment method until now, 10 years after its first appearance in 2008. These are payment fees, volatility, and taxes. For this reason, WSJ pointed out that despite Tesla’s bitcoin investment, the payment market is unlikely to change.
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The fee for each transaction goes up to $2-17.
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First of all, it is the burden of payment fees. According to BitInfochart, the median bitcoin payment fee is $5.40. However, the average fee is 11 dollars, and it varies greatly depending on network traffic at the time of payment. If there is a lot of traffic, the fee increases. Because of this, the average daily transaction fee over the past three months has ranged from $2.18 to as high as $17.20. In response, WSJ pointed out that “Bitcoin is not attractive to users who want to buy a cup of coffee for $4 at Starbucks.”
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Big volatility in price…a few minutes to cash out new losses
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Another hurdle for Bitcoin is volatility. Bitcoin has nearly quadrupled since September last year, but it is still exposed to volatility. New prices may skyrocket 20% a day or drop 20% for no reason.
“It takes a few minutes to monetize bitcoins on the payment platform,” said Christopher Barsha, a car dealer in Georgia, USA.
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Assets other than currency…you have to pay capital gains tax when trading
There is also a tax problem. The U.S. Revenue Service (IRS) treats Bitcoin as a property, not currency. For this reason, Bitcoin users must pay capital gains tax on transactions for any reason.
WSJ pointed out that because of this obstacle, even companies that accept bitcoin payments account for only about 5% of the total sales of cryptocurrency payments.
Investment bank JPMorgan predicts that other large companies will not follow Tesla to invest in bitcoin.
/ Reporter Noh Hee-young [email protected]
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