Despite being a mainstay in haircut conversations for nearly a decade, ‘disruptive’ cryptocurrencies have largely remained courteous to the traditional consumer. These digital currencies have, until recently, predominantly presented themselves as an alternative form of high-risk investment opportunities.
According to Google Trends, in the year leading up to the memorable crypto boom of December 2017, internet searches for Bitcoin rose by 1900%. Simultaneously, the value of Bitcoin compared to the USD grew at a mirroring rate of 2000%. Yes, this was clear evidence of word of mouth inspired bubble that was fated to collapse – but it helped raise significant public awareness of digital currencies that has only grown since. Since the birth of Bitcoin, events like this (see also: Bitcoin Pizza Day) have brought the idea of owning and using cryptocurrencies into a much more tangible space.
Moreover, from a venture capital point of view, blockchain is one of the current hot topics. So far in 2022, late-stage valuations (post-money) for VC-aided crypto companies have climbed on average by 91%, to nearly $4bn. The below graph, made by Sifted using data from Pitchbook, illustrates the growing M&A interest in this space.
As a result of this growing consumer and investor awareness, many B2C companies have begun enabling cryptocurrency payments within their eCommerce environments. Microsoft was one of the first household names to invest in these technologies, allowing online customers of the Xbox store to pay via Bitcoin. Following suit, large companies such as AT&T, Whole Foods and Starbucks have expanded their payment offerings also to include cryptocurrencies.
The global buzz around digital assets and the arguments for cryptocurrencies have expanded their reach beyond large merchants. SMEs and their shoppers alike have demonstrated an increased demand for access to these technologies and their benefits. For merchants, cryptocurrency payments are chargeback-proof, secure within the blockchain, home to low transaction fees and a way to open up to a whole new market. Their consumers are rewarded with a new payment method that is decentralised, fast and international.
The main challenges for merchants surround how to accept cryptocurrencies and how to convert between these and traditional fiat money. Most commonly, larger companies have partnered with crypto-conscious payment service providers such as BitPay and Coinbase to combat these challenges. However, these players have proved to be difficult and clunky to integrate for the SMEs.
Bolt is an online marketplace that serves both eCommerce businesses and shoppers alike. The businesses that operate on the Bolt marketplace are provided with traditional payments processing along with more SME conscious offerings such as One-Click Payments and integrations into popular shopping cart platforms (such as Woocommerce and Bigcommerce). On the flip side, consumers who shop through the ‘Bolt Network’ are granted access to a welcoming marketplace that houses these often unique and independent online stores. This ecosystem has firmly planted its flag in the space between cutesy Etsy and the giant Amazon. Bolt acquired cryptocurrency trailblazer Wyre for $1.5bn in April to expand their offering into the digital currency space. This is one of the most significant acquisitions in the cryptocurrency space to date.
In the said cryptocurrency space, Wyre is a Jack of many trades. Self-touted the “crypto stack for the new economy”, Wyre has pioneered a movement for democratizing and decentralizing payments and commerce alike. With an in-house crypto wallet, global fiat on/off ramp rails and a fully fleshed API library, they have just been at the centre of acquisition conversation for some time now.
In their crypto race against competitors Shopify and Amazon, Bolt’s acquisition is an aggressive move. As is the history and nature of crypto technologies, Bolt can now easily tap into the ingenuity of the millions of worldwide blockchain developers, backed up by integration into the robust Wyre stack.
From the perspective of Bolt’s merchants, they will be able to secure the relevant blockchain licenses more easily, address regulatory hurdles and integrate into the crypto ecosystem ready for accepting crypto payments. Moreover, because of this acquisition, consumers shall soon be able to purchase cryptocurrencies (and NFTs!) via the Wyre ledger and spend them on the Bolt network. This will provide both groups with all the benefits they have demanded for some time now and lower the barrier to owning digital assets.
On its face, one could view this acquisition as an eCommerce platform increasing its payment method offerings. This is far from a new concept. However, it is urged that this activity is instead viewed as the ‘next chapter in the story of decentralized commerce’ – a term that Bolt proudly uses. With Amazon touted to release their own cryptocurrency and a whole host of players wanting their own slice of the crypto cake, Bolt and Wyre are set to be a powerful contender in the years to come.
This article was written as a collaboration between Euan Jones (Business Analyst, London) & Volker Schloenvoigt (Director, London)
The content of this article does not reflect the official opinion of Edgar, Dunn & Company. The information and views expressed in this publication belong solely to the author(s).