According to CoinMarketCap, the value of the 1,610 cryptocurrencies it tracks is now over $411 billion. Nonprofits looking for a taste of that wealth should, at a minimum, develop the policies and infrastructure to accept crypto donations.
Much of the available wealth measured in crypto today is new. Bitcoin traded below $200 as recently as January 2015 and has a value 44 times higher at $8,854 as I write this. Other cryptocurrencies have had similar increases in value.
It is important to note, however, that Bitcoin and some other cryptocurrencies are well off their peaks. Late last year, Bitcoin traded near $20,000. Still, substantial value is still tied up there. Bitcoin has a market capitalization—value per coin multiplied by the number of coins in existence—of just over $150 billion.
Before we continue, let me offer an important note of caution. This article is not intended to opine on the question of whether buying or holding any cryptocurrency is a good idea. It is clear that crypto is volatile (read risky) and may not be an appropriate investment for individuals or nonprofits.
Ryan Scott, ICO advisor who focuses on social impact applications at ICO Impact, says, “I do believe nonprofits should start accepting Bitcoin and other cryptocurrencies.”
He offers two reasons. First, he notes that simply accepting crypto and converting to USD or “fiat” currency in the parlance of the crypto community, referring to government-issued currency, will give nonprofits an education into the use and function of a technology that promises to become as ubiquitous as the internet.
The second reason: “There are a lot of very crypto-wealthy individuals who have more money than they know what to do with, but one thing is for certain – they aren’t converting it to fiat.”
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