Use of bitcoin for payments is decreasing, according to Bitpay
The use of bitcoin as a digital currency for payments has dropped significantly, according to figures stemming from Bitpay, a leading cryptocurrency payment processor.
While most purchases were made with bitcoin in 2020, that dominance has waned, making room for other tokens and coins such as ethereum and stablecoins to enter the crypto payments scene.
The use of BTC as a digital payment currency has declined since 2020. This was the conclusion that Bitpay, one of the leading cryptocurrency-based payment processors, had when reviewing the numbers that the market left over the past year.
Bitpay told Bloomberg that bitcoin’s dominance for purchases on its platform dropped from 93% in 2020 to 65% in 2021. This loss of nearly a third of its share is related to the entry of other currencies into the payments arena.
The rise of stablecoins and the popularity of Ethereum over the past year has also reached the payments arena. Bitpay explained that platform users paid 15% of purchases with ether, while stablecoins accounted for 13% of payments last year. Other newcomers like shiba inu, dogecoin and litecoin accounted for 3% of the payouts.
While the use of bitcoin to make payments declined during 2021, the use of cryptocurrencies for payments in general managed to increase. The total volume of payments Bitpay made in 2021 increased by 51%.
The growth in the use of Bitpay was probably due to the popularization of cryptocurrencies and also the rise in prices that the market experienced last year. About this, Bitpay CEO Stephen Pair stated:
“Our business comes and goes to a certain extent with the price, when the price goes down, people tend to spend less. [But] we haven’t experienced as much of a decline in volume with this recent pullback.”
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Bitpay, being one of the most recognized cryptocurrency payments companies and managing huge sales volumes, is still overshadowed by traditional payment companies like Visa and Paypal. But for Pair, the field is young and the company is in a very good position for the future. He declared:
“We really like where we are strategically. This space is still very young. A lot of this has to do with how we think about time. In the next two years, we are likely to see very substantial growth.”
Other traditional companies have also entered the competition for crypto payments. Paypal announced that it would begin processing cryptocurrency-based payments in March.