Overstock’s Bitcoin bet brings in $20-30K every day, CEO says

Patrick Byrne

Patrick Byrne

Overstock.com recently announced that it has done more than $1 million in Bitcoin sales since the company started offering customers the ability to use the digital currency to purchase items. But how does that affect the company’s day to day operations?

According to Patrick Byrne, Overstock’s CEO, the company is seeing tens of thousands of dollars in Bitcoin sales every day.

“There was a huge surge (in Bitcoin spending) the first day, with people showing support. It’s since dropped to $20k to $30k per day, but it’s gradually increasing from there. It’s going well,” he told Business Insider.

Through a partnership with Coinbase, Overstock immediately turns all of the Bitcoins it receives into dollars, so the company isn’t holding any of the currency long-term.

According to Byrne, retailers gain a number of advantages from using Bitcoin. Because transactions through Bitcoin are irreversible, there’s no way for a customer to request a chargeback, which means that it’s difficult to commit fraud. The currency also doesn’t require the high transaction fees that are standard for credit card companies.

Byrne has predicted that the Bitcoin market will grow so much that Amazon will have no choice but to start accepting the cryptocurrency, and if its daily sales numbers keep growing, that may be the case. But one of the advantages Overstock has right now is that it’s the only major e-retailer to offer a Bitcoin purchase option. If someone with Bitcoin wants to buy a product online, there’s a good chance they’ll turn to Overstock.

If Amazon enters the market with its own Bitcoin offering, it’s not clear what each company’s cut of the Bitcoin revenue stream would be. Given how fluid Bitcoin’s price is right now, allowing transactions in the cryptocurrency may not be worth the hassle just yet. After all, $30,000 is a lot of cash, but it’s a drop in the bucket for a company that pulls in millions of dollars a day.

  • JA JA

    “Because transactions through Bitcoin are irreversible, there’s no way for a customer to request a chargeback, which means that it’s difficult to commit fraud.”

    sounds like a great place to use some stolen bit coins :D

    • Mike

      If they didn’t cash in when they started accepting them, they’ve lost a ton of cash now.

      • Dumbhandle

        I read that they were selling them to Coinbase on the same day for market value. I also read that they may be keeping some of the receipts in bitcoin and not converting that portion back to USD. I seem to remember 10%.

  • crainbf

    What’s also important is that because of the lower transaction fees, Overstock might make at least 50% more profit on Bitcoin sales. (Supposedly, they have a 2% profit margin normally.) So in that sense $30,000 revenues from bitcoin sales might generate as much profit as $45,000 in revenues from credit card sales.

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