Bitcoin Payments Decline as Other Cryptocurrencies Grow
The leading crypto payment processor, BitPay Inc., says the interest of consumers and businesses in Bitcoin-Motion payments has been on a downward trend.
Within the last twelve months, most merchants on the platform have shown a preference for altcoin transactions. BitPay reported that Bitcoin’s dominance over crypto transactions is receding at a fast pace, despite the increase in the value of the coin last year.
This statement was backed by data that shows that the use of Bitcoin (BTC) by BitPay merchants has fallen from 92% in 2020 to less than 65% today.
The company’s representatives revealed that the remaining 35% was accounted for by Ether, Shiba Inu, and Litecoin. This could very well mean the end of BTC’s dominance in crypto trades.
Last year, the crypto industry expanded massively, thanks to an overall increase in the value of bitcoins and altcoins.
The surge in the price of these digital assets was corrected a few times during the years, but it was enough to boost the use of these alternative coins in the crypto ecosystem.
Consumers and businesses have a more accepting view of altcoins and are building their firms around these new tokens. In addition to this, the use of tokens other than Bitcoin for purchases and trades on several platforms has started on a good foot.
With this trend, Bitcoin will be displaced as the king of crypto transactions. The fantastic part of this is that not one or two coins would replace it, but at least three altcoins and stablecoins.
According to BitPay, ether purchases accounted for approximately 15% of total transactions, stablecoin purchases accounted for 13%, and Dogecoin, Litecoin, and Shiba Inu (all listed on BitPay in 2021) accounted for 3% of total transactions.
Compared to 2020, when Bitcoin’s use for transactions was 92%, while altcoins and stable coins accounted for the other 8%.
Bitcoin payments decline: Purchases with Altcoins and Stablecoins
The past few months have been fun in the crypto industry. Innovative firms have contributed to the surge in the use of altcoins and stablecoins for purchases—many of which are cross-border trades and payments.
Last year, Tesla CEO, Elon Musk, made a splash with Dogecoin (DOGE) when he announced that the altcoin was acceptable for purchasing the company’s products.
Crypto users lauded this move. The only challenge was the lack of stability in the coin’s market price. To avoid this volatility, consumers tend to use stablecoins like USDT and USDC (stablecoins have a steady value).
Ever since the value of cryptos began falling in November, businesses and consumers have stayed glued to stablecoin for payments, preferring to hold on to their tokens.
According to BitPay, the majority of cryptocurrency transactions last year were for high-end items such as watches, automobiles, boats, jewelry, and, ironically, gold stocks (Crypto experts have always predicted that the rise of Bitcoin would lead to a decline in gold prices).
According to the company’s CEO, Stephen Pair, the total transaction volume for these luxury items went from 8% in 2020 to 32% in 2021. He also added that the full payment volume across the platform increased by 56%.
BitPay processes over 60,000 crypto transactions every month. The 11-year-old company processes crypto payments for companies like Microsoft Corp. and AT & T Inc. This gives it enough data to serve as the industry’s barometer.
Mr. Pair revealed that the spending habits of crypto users had not been significantly affected by the recent decline in the value of cryptos. However, the CEO clarified that the company’s business is determined to some degree by the current market prices of tokens. “People spend fewer cryptos when pullbacks like this occur,” said Pair.
Bitcoins are the highest valued cryptocurrency, and crypto users view these tokens as an investment. This latest trend shows that crypto investors are holding onto their Bitcoins and waiting patiently for them to regain the value they lost between November and January. The legendary coin reached a new ATH of $69k in November before decreasing.
Currently, one bitcoin is priced at a value below $40,000. Crypto experts have clarified that it is normal for a coin to show more volatility at the end and beginning of a year.