Freelancer marketplace operator Fiverr has removed bitcoin as a payment option on its platform. The company’s PR manager, Sam Katzen, explained that the move was informed by a lack of interest in bitcoin transactions on the site.
Fiverr sent email to users telling them it had stopped accepting bitcoin on January 19, 2017, without hitting whether it has dropped bitcoin permanently or would restore it at a future date.
While Fiverr will no longer accept bitcoin payments, it said that other payment options such as PayPal, debit or credit card and the native Fiverr credit remain supported on the site.
Since launching in 2010, Fiverr has positioned itself as a job outsourcing site featuring a wide variety of gigs for contracts starting as low as $5. In 2014, Fiverr partnered with bitcoin exchange operator Coinbase to introduce bitcoin as a payment option for its users. But Fiverr has decided to make a U-turn on the bitcoin move less than three years after it joined the bitcoin economy.
Amendment of Israel’s tax regulations
Though the company insists that its decision to pull down bitcoin payment was informed by a lack of user interest, speculations are rife that Fiverr’s move may have been influenced by changes in Israel’s tax regulations. Under the new regulations, the Israel Tax Authority (ITA) treats cryptocurrencies such as bitcoin as assets rather than a foreign currency.
Treating bitcoin as an asset means bitcoin transactions are regarded as barter trades and any profits earned from such activities are subject to capital gain tax. In Israel, capital gain attracts a tax of at least 25%.
Fiverr may have decided to exit bitcoin dealings to avoid the taxes arising from the update of the tax code in Israel. Founded in 2010, Fiverr is headquartered in Tel Aviv, Israel. However, the company’s services can be accessed in 190 countries and it operates offices in New York City, San Francisco, Chicago and Miami, all in the U.S.
If Fiverr’s bitcoin move was influenced by Israel’s tax rule changes, then the company may have also noted that U.S. also presents a bitcoin problem. The US Internal Revenue Service (IRS) is seeking several years of customer data from Coinbase in move seemed aimed at identifying tax evaders. As with the case in Israel, the US also considers bitcoin an asset rather than a currency, making it subject to capital gain tax.
Bitcoin price volatility
Others have speculated that Fiverr’s exit of bitcoin economy may also have been informed by recent bitcoin price volatility. Bitcoin soared to more than $1,100 at the beginning of January before pulling back to around $750. The digital currency has recently been seen climbing again.
Many marketplaces still accept bitcoin
Though Fiverr has eliminated bitcoin payment on its site, the digital currency remains supported in many other online marketplaces and freelancer sites. Those who buy goods and services online and would like to continue paying with bitcoin can still use the virtual money on sites such as XBTfreelancer, Cryptogrind, Coinality, https://www.reddit.com/r/Jobs4Bitcoins, Bitlancerr and more.
Worries over global economic uncertainty stemming from stemming from a seemingly unique U.S. presidential election sparked strong demand for bitcoin and other cryptocurrencies. That led to bitcoin rising 100% in 2016. For many risk averse-investors, cryptocurrencies have become modern day safe-haven assets and they are gradually replacing gold, silver and other precious metals in safe-haven portfolios.