Bitcoin

Why more businesses may adopt bitcoin

Key Points

Forget the regulatory crackdown in China. U.S. businesses are helping the controversial cryptocurrency known as bitcoin to make a price comeback.

On Saturday, Zynga, the San Francisco-based social game maker, quietly took to Reddit to announce that it's now accepting bitcoins as a form of in-game payment. The pilot program, which Zynga is working on with bitcoin payment processor BitPay, will be offered for seven games including Farmville 2 and Castleville.

"Zynga is always working to improve our customer experience by incorporating player feedback into our games," the company's Reddit post said. "We look forward to hearing from our players about the bitcoin test so we can continue in our efforts to provide the best possible gaming experience."

Zynga has begun testing use of bitcoin payments.
Karen Bleier | AFP | Getty Images

Almost immediately following the news, the digital currency's value began to climb. By Monday morning, it had topped $1,000, then fell below that mark a day later on the online Mt.Gox exchange. The recent increase comes on the heels of a dramatic dip, after regulators in China enacted a crackdown on the digital currency in mid-December that caused BTC-China to stop accepting deposits in yuan. That news had sent bitcoin prices tumbling nearly 50 percent from a Dec. 4 record-high of $1,238.

(Read more: Bitcoin breaks $1,000 after Zynga opts in)

But Monday's rally also brings into focus a budding trend: U.S. businesses may be beginning to utilize bitcoin to specifically attract a key consumer base.

"One thing that people haven't focused on with bitcoin is that its users are a very attractive advertising demographic," said Nicholas Colas, chief market strategist at ConvergEx Group.

The typical user has been profiled as a tech-savvy male, age 25 to 40, with above-average income, commonly residing on one of the U.S. coasts, according to Colas. Indeed, several surveys and reports show similar findings, including data released by Quantcast last April.

Zynga testing bitcoin
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Zynga testing bitcoin

Zynga is the latest among a growing number of companies adopting bitcoin. Last month, online retailer Overstock.com announced that it would roll out a bitcoin purchasing option, expected in the second half of the year.

(Read more: Overstock CEO: Why we'll take bitcoins)

Other businesses that have taken to the digital currency include dating site OKCupid, blogging platform Wordpress, social news site Reddit, and billionaire entrepreneur . Even a New York City-based real estate firm, BOND New York, is offering clients the option to pay broker fees in bitcoins.

And analysts are beginning to take a closer look at the companies that could gain from bitcoin adoption. Wedbush analyst Gil Luria recently sent out a note detailing the businesses that stand to gain (or lose) the most from cryptocurrencies like bitcoin. Among those Luria believes could enjoy a boost are eBay, IBM and Overstock, which he notes will benefit in part from a "publicity push within the bitcoin community."

"Nerds, techies—whatever you want to call the early bitcoin adopters—it's is a very high-level demographic that's using this," said CJ MacDonald, co-founder and chief operating officer of Gyft, a mobile gift card app that offers a bitcoin purchasing option. "We have had some high-profile, high-end retailers saying they want to adopt it to go after this very group."

(Read more: Buzzfeed COO: How I mined for bitcoins )

The San Francisco-based company peddles gift card offerings for over 200 vendors, including Victoria's Secret, Target and Whole Foods. On the Gyft platform, bitcoins can be used to purchase them all.

MacDonald said that over the last six months, since the site added bitcoins, it has welcomed millions of dollars in sales through the digital currency. Of course, the main purchasers are males fitting that "early bitcoin adopter" profile.

So what are they buying? "We see a lot of electronics—Best Buy or Amazon or Crestfield gift cards," he said. "We even had one guy use bitcoins to buy Crate and Barrel gift cards to furnish his whole house."

—By CNBC's Morgan Brennan. Follow her on Twitter @MorganLBrennan.

- Correction: An earlier version of the story referred to the New York real estate firm as CORE New York. It has been corrected to read BOND New York.