Overstock.com (NASDAQ:OSTK) isn't known for making many headlines. How can it when Amazon.com (NASDAQ:AMZN) dominates the news in the online retail space? However, this is an exception to the rule. Overstock CEO Patrick M. Byrne has decided to take a risk that could lead to market-share gains against Amazon and other online retailers: Overstock has become the first major retailer to accept Bitcoin payments. What are the details? Will it matter?

Overstock strikes first

It might seem risky for Overstock to accept Bitcoin payments, but the upside potential appears to outweigh downside risk. By accepting Bitcoin payments, Overstock broadens its target customer base. According to Byrne, Overstock grossed $130,000 for 840 orders on the first day that the company accepted Bitcoin. In his opinion, massive amounts of people will shift their online spending to Overstock, and Amazon will eventually be forced to accept Bitcoin as payment if it doesn't want to lose market share.

Amazon, by the way, has no plans to accept Bitcoin as a payment option. This is interesting considering that Amazon CEO Jeff Bezos is all about taking care of customers in every way possible. Bezos likely doesn't feel comfortable with the volatility of Bitcoin, which stems from it being non-government-issued.

If you're not familiar with Bitcoin, it's a form of digital currency. You buy digital money and transfer that money to a digital wallet. The advantages are that there are no credit card numbers required and counterfeiting is nearly impossible due to the currency's cryptographic nature. Bitcoin has certainly gained popularity lately: Processing volume increased 6,260% in November, year over year.

You likely think of Amazon when you think of online retailer growth, but Overstock has grown its top line almost as fast over the past year:

Additionally, Overstock's profit margin is 1.90%. Not great, but more comforting than Amazon's profit margin of 0.19%. Amazon is also trading at 1,448 times its earnings, whereas Overstock is trading at 29 times earnings.

While all of this information might lead you to believe Overstock is a significant danger to Amazon, that's not the case. Yes, Overstock has potential to steal market share by accepting Bitcoin as payment, but Amazon has a market cap of $183 billion. Overstock is a much smaller company, sporting a market cap of $681 million. Even if Amazon began to see Overstock making strides with Bitcoin payments and even if Bitcoin became a widely accepted form of payment (and it is now accepted by the Sacramento Kings and Zynga), Amazon could always add Bitcoin as a payment option. Amazon doesn't need to worry about Overstock as much as Wal-Mart (NYSE:WMT) and Target (NYSE:TGT).

Bigger threats

According to global analytics company Alexa.com, Walmart.com currently has a global online traffic ranking of 139 and a domestic online traffic ranking of 39. This is nothing compared to Amazon.com, with a global traffic ranking of 9 and a domestic traffic ranking of 5. However, Wal-Mart is working hard to grow its online presence. Though Wal-Mart has been working on innovative measures to improve its online presence, accepting Bitcoin could lead to immediate market share gains over Amazon. Unlike the situation with Overstock, this would likely concern Amazon.

As far as Target goes, it has a global traffic ranking of 240 and a domestic traffic ranking of 63. It might seem as though Target would be less of a concern to Amazon. Given Target's highly publicized data breach and its focus on becoming more technologically savvy to meet today's consumer demands, it might be more likely for Target to accept Bitcoin in the future.

If either Wal-Mart or Target were to accept Bitcoin as payment, then Amazon would likely soon follow. The only way Amazon could potentially lose market share online is if it waited too long. The other risk, which doesn't pertain to market-share gains and losses, is that people lose confidence in Bitcoin and it becomes worthless. Though not likely in the near future, this is an eventual possibility.

How to play it

Thanks to accepting Bitcoin, Overstock should see increased sales. Bitcoin does have a cult-like following, and if Bitcoin users all begin to transfer their online shopping to Overstock, then it could help fuel the company's top line and stock price. As far as Amazon goes, it shouldn't be affected one way or the other in the short term, so it won't be singing the Bitcoin blues. If Amazon witnesses a positive and sustainable trend for Bitcoin, it will likely get on board eventually. This is especially the case if Wal-Mart or Target also were to start accepting Bitcoin as a form of online payment.

Conclusively, due to a strategic maneuver that's in line with a current positive trend, you might want to dig deeper on Overstock. However, Amazon shouldn't be affected by this news. Amazon investors should be more concerned about valuation and extremely high expectations. If you're a Wal-Mart or Target investor, keep in mind that accepting Bitcoin online would have a minimal impact on either company, at least in the early stages. It's more about how these moves would affect Amazon, and Amazon wouldn't allow its biggest competitors to gain too much of a lead before entering the fray.