Utilizing electronic cash to improve the profitability of business: Сase of Bitcoin

Abstract

In the last years with the development of the Internet as well as growth of e-commerce, the cashless payments are gaining wide popularity. This paper reviews the main types of cashless payment systems and analyzes Bitcoin as an instrument to decrease the transactions costs and attract new customers for companies, representing international business. At the moment, the relative unawareness of Bitcoin technology and its high volatility act as main barriers to wide acceptance of Bitcoin in the business. To investigate the price formation mechanism of Bitcoin the regression analysis is performed, which reveals the significant correlation between price of Bitcoin and fundamental factors (supply/demand) and demonstrates that this cryptocurrency is now at the stage of stabilization. The financial analysis of two companies, which have utilized Bitcoin, allowed to make conclusion that Bitcoin intregration contributes to the increase in profits. The results of this paper may be used by business managers, including Russian companies, who are interested in the innovative business solutions, which facilitate the increase of profits and attraction of new customers.