One of the requirement that Bitcoin and other cryptocurrencies need to fulfill before getting the approval of critics is adoption by mainstream companies. This latest development in Bitcoin, in which a luxury hotel in Switzerland started accepting Bitcoin as payments is a huge news for Bitcoin investors and would-be investors, and for cryptocurrency as a whole.
People staying at The Dolder Grand, a top 5-star luxury hotel in Switzerland would be able to pay their hotel bills and other expenses with Bitcoin starting today. Bitcoin would be accepted for room reservation fees, spa, and even for small expenses such as coffee. The move was first announced on the 2nd of April, which saw a Bitcoin price increase of 23 percent.
The managing director of the hotel, Mark Jacob has given his insights regarding the move. He said that the move was to test if Bitcoin would work as payment. He added that they are not really sure if the move to accept Bitcoin as payment would be successful or not.
“Whether exactly this (bitcoin payment) solution will be a permanent and sustainable solution, we don’t know,” Jacob said, expressing that the success of their move would determine if it will continue. He also stated that they were aware of the risks of accepting a cryptocurrency as payment, saying that:
When you are the first mover or part of the first ones that move, there is always a risk that the solution will not gain traction. But I think it would be a failure if you don’t give it a try.
Time will tell if Bitcoin would gain traction as a payment option in The Dolder Grand. However, data provided by blockchain firm Chainalysis shows that most commercial companies stopped using Bitcoin last 2018, with drop rates reaching as much as 80 percent.
For example, Steam, a website selling video games, scrapped their Bitcoin payment option after only a year of accepting the cryptocurrency. Valve, the company behind steam put the blame on expensive transaction fees as the reason for the removal. Valve’s move to remove their Bitcoin payment option was soon followed by Expedia, a travel management portal as well as Stripe, a payment processor.
Common reasons provided by companies who stopped accepting Bitcoin after implementing them are problems arising from regulatory bodies, high transaction fees, and price volatility.
However, in Switzerland, this is not the case as businesses still have an interest in entering the Bitcoin market. This is seen in this development, in which a 5-star luxury hotel implemented their Bitcoin payment option despite the lackluster performance of the cryptocurrency as a crypto asset last year.
Lucas Betschart, the president of Bitcoin Association Switzerland has given his opinion in the latest development, saying that:
“I expect more Swiss companies to accept bitcoin over the next two years to attract tourists who save money by paying bitcoin,” emphasizing that Bitcoin’s adoption by merchants is anticipated to increase.