Crypto world

Ethereum's Bullish Breakout: The Volatility Factor in Crypto Payments

Ethereum's volatility poses risks for freelancers in crypto payments, pushing them toward stable alternatives. Explore payment solutions and future trends.

Ethereum's volatility poses risks for freelancers in crypto payments, pushing them toward stable alternatives. Explore payment solutions and future trends.

Ethereum is on the move again. As it looks to finally break out of the bearish trend it has been on for weeks, this could have considerable impact on the lives of many out there accepting crypto payments. If it all plays out, that is.

But…. Ethereum's volatility could be the bane of those trying to receive crypto payments in a timely manner. So, let's dive into the risks that are incoming, and if there are other options that can help out.

A Bitcoin Alternative?

Ethereum is consolidating in a falling wedge what looks to finally be a bullish breakout. At approximately $2,771.52, ETH has slightly dipped by 0.59% over the last four hours. With key indicators suggesting buying pressure is on the rise as the Money Flow Index (at 59.46) slightly outweighs the selling pressure. This means there are still more chances for the price to go up. It should be mentioned that the Relative Strength Index at 64.00 also says ETH is in an uptrend.

It's safe to say, it's a volatile time to be in.

The Impact on Crypto Payments

What does this imminent volatility mean for receiving crypto as payment? Well, it is going to create a pain point between transaction and settlement. The price can fluctuate dramatically during this time. While crypto payments in the larger context are meant to be more stable than fiat ones, the volatility of ETH is going to create potential problems in the meantime. So this is probably going to be the alternative to payment in usd for most clients.

Risks of Cross-Border Transactions

There are also some serious risks when accepting cross-border transactions with Ethereum as a crypto payment solution. With its relatively anonymous nature, it is a prime target for criminals to exploit. Fraudulent activities such as money laundering could thrive there going forward, thanks to the lack of regulations around it. Second, the potential security risks could also create vulnerabilities in smart contracts, resulting in losing significant financial resources. This means freelancers would need to be vigilant.

Better Payment Methods Available

If ETH's bullish breakout does not pan out, Indian freelancers do have a variety of robust and secure payment methods available for cross-border transactions, including traditional and digital payment systems that function seamlessly. Debit and credit cards are still viable options, as are mobile wallets like PhonePe, PayTM, Amazon Pay, and Google Pay, which typically charge lower processing fees. UPI payments, which access customers' bank accounts directly, are also another secure digital currency payment gateway to consider.

There are also third parties like PayU and Cashfree Payments that can tailor solutions to suit each business's needs.

The Final Word

The outcome of this bullish breakout hugely depends on external macroeconomic factors. The declining exchange reserves of Ethereum should mitigate selling pressure (from 30 million to 19.3 million over the past year), which suggests upward potential for price. That said, rising inflation and interest rates could impact speculative trading and keep the price in a consolidation phase.

As a freelancer, having a mix of reliable payment currencies will be needed going forward depending on how Ethereum's volatility continues to shake up the market for them.

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