The Risk of Cryptocurrency Payment Adoption

The rapid development of blockchain technology enables the application of cryptocurrency payment in real business practice. However, no research has examined the net effect of adopting such technologies on firm performance. Leveraging a unique research context that Booking.com starts cooperating with Travala.com, this study collects consumer reviews of the same hotels listed on Expedia and Booking.com in all states of the US and employs difference-in-differences designs. This study has three main findings. First, the adoption of cryptocurrency payment via Travala.com induces a net decrement in online sales on Booking.com. Second, the sales decrement is mainly driven by upscale hotels. Third, the sales decrement is severer when the cryptocurrency price is lower. These results are robust across hotels in all the states of USA and can be generalized using a later adoption of cryptocurrency payment. We interpret the mechanism as users’ negative associations and provide evidence by an event study analysis