The rest of my daughter's preschool tuition is due on June 1st. I just got a message from the school informing me that they are pleased to announce that they will now be accepting bitcoins for tuition payments.
It's a really interesting time to be getting this email given that the value of a bitcoin has gone up 30% in the past week and has doubled in less than two months.
If I chose to take them up on their offer I would be paying them about nine and a half bitcoins at the current price. If I had paid my bill in bitcoins a month ago it would have cost over 17 bitcoins. Two months ago I would have owed them nearly 24 coins.
This seems a bit too speculative for both us and the school.
Are they betting that bitcoins are going to continue to go up? What if they don't? This week alone bitcoin saw a massive reversal that — had it continued — could've caused the school a lot of trouble.
Or are they simply providing a service for extremely tech and finance savvy parents by converting the coins to cash immediately?
Either way, to me it seems too speculative for just a regular bill paying task. I know there is no difference between me paying with bitcoins I already own, because I can just purchase more at the same price.
But if I don't replace my bitcoins and the value doubles or triples before the first day of school, I will feel like I paid two or three times as much I should have. This feeling of regret avoidance is a behavioral bias that I should be able to see past — but I simply can't.
And it seems my husband feels the same. He emailed me immediately saying "I think we should pay in USD."
So, for now, our few precious bitcoins will stay in our account and maybe we can pay next year's tuition with one coin instead of ten.
UPDATE: I have heard from the school since this article was published. They have informed me that when the bitcoin is transferred into their Coinbase account it goes directly into their USD wallet and is converted to dollars instantly. According to the school, they are not exposed to any exchange risk.
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