TLDR
- Virgin Voyages becomes the first luxury cruise line to accept Bitcoin as payment for its Annual Pass program.
- The Annual Pass offers unlimited cruises for a year, with an upfront fee of $120,000 plus taxes, payable in Bitcoin.
- Companies are accepting Bitcoin to attract wealthy “crypto whales” and to enable global transactions.
- Bitcoin’s price volatility risks financial losses.
- Potential capital gains tax implications for businesses.
Virgin Voyages has made the decision to accept payment in Bitcoin for its new program called “Annual Pass”. This is an interesting strategic step to attract crypto holders, particularly businessmen and entrepreneurs. Virgin Voyages is recognized as a go-to luxury travel company. Hence, its decision to become the first cruise line to accept cryptocurrency as payment marks a remarkable moment.
The company will accept Bitcoin, valued at $101,542 (right now), as payment for its new service, which requires an upfront fee of $120,000 plus applicable taxes per individual cruise. It is currently unclear whether Virgin Voyages will expand its cryptocurrency options to include stablecoins.
The Annual Pass will provide unlimited cruises for a whole year on a limited, first-come, first-served basis. As per the company, this offering was inspired by the success of its “Season Pass” program, which primarily targeted remote workers.
The Virgin Group founder Richard Branson shares:
“What started as a sought-after ‘work from sea’ concept with our Season Pass has evolved into something even more special. Now, Sailors can jump aboard any of our ships, across an endless variety of exciting destinations for an entire year. We’re offering unlimited opportunities for adventure in a way that has never been done in cruising before.”
Why Companies Are Now Accepting Bitcoin
When a major company such as Virgin Voyages starts to accept Bitcoin, it shows that major businesses in the market are now taking cryptocurrency seriously. Previously, it was not something that traditional businesses and entrepreneurs took seriously, but now Bitcoin’s popularity is increasing day by day.
The main reasons companies are accepting Bitcoin now is that it gives them access to wealthy Bitcoin holders. These “crypto whales” are a lucrative market that will provide a lot of sales. Virgin Voyages opening up this option to accept Bitcoin will lead to a customer base with a lot of spending power.
Moreover, cryptocurrency is always perceived as innovative and something from the future. So, when companies adopt cryptocurrency as an option, then it gives the impression they are forward-thinking. A lot of modern customers would want to align themselves with visionary companies that take on the latest trends.
Another factor that makes Bitcoin an attractive option for big companies is that it has a global appeal. Since Bitcoin allows for decentralized payments, there is no currency exchange complication and no extra fees. That is especially useful for businesses who currently have a global clientele or those looking to get one.
Companies also see Bitcoin as a form of long-term investment as Bitcoin might get its price appreciated in the future. So, when they have Bitcoin as an asset, they are essentially getting an asset that has the potential to increase in value later on.
Are There Any Downsides to Accepting Bitcoin?
Accepting Bitcoin as a payment option is a strategic business decision that will have a lot of benefits. There are still some limitations associated with it. The main risk factor with accepting Bitcoin is its volatility. While we know that Bitcoin can appreciate in value, it can also depreciate in value. So, there is a potential loss of value in the future which could lead to considerable loss for the business.
Moreover, when the value of Bitcoin appreciates in value, there might be tax implications. Companies that have accepted Bitcoin whose value has since increased, may have to pay capital gains tax on the profit made, should they decide to move it off the balance sheet.
