Bitcoin is music to musicians’ ears – at least for some of them.
Bitcoin and cryptocurrencies are constantly teetering on the knife’s edge of promise and peril – where holders want to use the digital offerings to transact and get paid. Yet the price volatility of these same offerings makes it hard to determine just what an exchange is worth.
Timing, as with so much else in life, is everything.
Converting bitcoin into fiat at the “right” moment can represent a windfall, giving the holder purchasing power far above where he or she originally bought the crypto. The reverse scenario can be true, too.
In a sign that cryptos are inching further into the mainstream, Coinbase said this week that it is partnering with UnitedMasters to enable the music distributor’s musicians to be paid in cryptocurrencies for the music they create. The musicians themselves can choose to be paid in U.S. dollars or cryptos, in whole or in part.
“The artists can also take advantage of Coinbase’s full set of product offerings — including spending, earning, trading and borrowing — to help them to do more with their crypto,” Coinbase said in the release.
To be sure, there is no shortage of online platforms that ensure payments get to creators. One example is Patreon, which matches six million monthly active patrons with more than 200,000 creators, enabling payments through conduits like PayPal.
For Coinbase, the partnership represents a way to get new users onboarded into the crypto ecosystem it is creating. The news of the partnership with UnitedMasters comes soon after Coinbase said it will offer direct deposit in the U.S., enabling customers to deposit part of their paycheck into their Coinbase account. Late last month, the company said accoun-holders can opt to get paid in any of the 100+ cryptocurrencies available on Coinbase, or in U.S. dollars.
Playing the Timing Game
As to the timing aspects: It may be the case that the musicians – and any artists that look toward embracing crypto rather than dollars (or any other hard currencies) paid directly into their accounts – are playing a bit of a waiting game. In other words, these recipients are making an implicit bet.
The bet is that by holding onto the crypto, whether bitcoin or an alternate holding, they can wait until the price will rise, convert that crypto into fiat at a desirable price point and then spend the cash. This also implies that they have enough disposable income to park in accounts held by the exchange, and play that waiting game.
The reverse situation is certainly true – where the crypto holdings’ value can drop precariously, and the musician or artist can see the value of that account shrink markedly. It’s a risky proposition, to be sure.
Familiarity may breed confidence in embracing cryptos in everyday use cases. As noted in recent PYMNTS research, 18% of the adult population is likely to use cryptocurrency to make a purchase — some 46 million consumers, including 17 million non-owners.