by Jamie Holmes
Retail giant and early bitcoin adopter Overstock announced on August 8 the integration of major cryptocurrencies with a partnership with ShapeShift, as well as revealing that the company will go from holding 10 percent to half of all bitcoin spent with the merchant.
With bitcoin frequently featured in mainstream media as of late with the rapidly rising price, the cryptocurrency received a substantial amount of attention in Overstock’s latest earnings conference call. When asked if the greater publicity around bitcoin had an effect on the company's sales, CEO and Founder Patrick M. Byrne stated:
“We have seen a material change, in part because of everything in the news it spiked and then it settled back down to about $50,000 per week.”
The figure stated by Byrne suggests that there is a small, hardcore group of bitcoiners who use it as money and mentioned that the $50,000 in bitcoin spent per week has remained persistent over time. But the Overstock CEO also confirmed a change in the strategy toward bitcoin, upping the amount held from 10 percent to 50 percent, contributing to an increased scarcity of the cryptocurrency:
“And we have changed our strategy on accumulating Bitcoin. We've gone from keeping 10 percent of what's spent with Bitcoin to keeping 50 percent. In Bitcoin, we just got board approval for -- to keep 50 percent of what is spent in Bitcoin or in other cryptosecurities.”
Through the accumulation of the most popular cryptocurrency, Byrne alluded to the formation of a portfolio of cryptosecurities that would be maintained by the company. The conference call also highlighted a new investment in a blockchain-based company, Symbiont, by Medici ventures, a subsidiary owned by Overstock. Jonathan E. Johnson, Director of Overstock stated:
“Symbiont is a great company based in New York. It's got an encrypted distributed ledger platform that allows multiple parties to reach consensus quickly. We like it's management, we like it's technology. It's currently receiving recurring revenue from a private equity trading platform that operates in Asia. It's got a deal with Delaware to put corporate records on the blockchain, both Medici and then later Overstock are going -- plan to take advantage of that. And it has a proof-of-concept that's working on for smart truck contracts and loan settlements.”
On the topic of hoarding and spending cryptocurrency, Johnson added that it will take some time before we start to see consumers becoming comfortable with spending bitcoin or ether, but stated that the company’s investments in startups may speed this up in the US:
“It hasn't happened as much -- it hasn't happened in the U.S. But we do think, with our investments in Bitt and Ripio and Spira, that we will be part of the acceleration process for acceptance of cryptocurrencies.”
The following day on August 8, the company announced it would be accepting every major digital currency, including Ether, Litecoin, DASH, Ripple, Monero and XEM and marks a significant step for the acceptance of cryptoassets in general. Byrne stated that the company would accept up to 45 digital currencies at any given time, and gives their customers, dispersed over 129 countries, greater choice and freedom.
ShapeShift will aid Overstock in converting all altcoin purchases to bitcoin for Overstock, where the digital asset exchange built an API specifically for this purpose. The retailer will also accept the newly formed altcoin, Bitcoin Cash, which split from the Bitcoin blockchain on August 1. Byrne hopes that the retailer’s move will spur the adoption of altcoins amongst the wider economy.
The decision from Overstock sure is interesting and may even convince other large, well-known brands to embrace and ‘HODL’ bitcoin. Bitcoin is now beginning to become desired by merchants who deal with the cryptocurrency and it seems that more and more these retailers will ask themselves why they never kept a proportion of their bitcoin revenue, as the cryptocurrency consistently breaks to new highs against fiat currencies.