According to data from Bitpay, one of the leading cryptocurrency payments processors, Bitcoin’s rule over crypto transactions has been on a steady decline since 2020.
Bitcoin’s control of the crypto payments industry seems to be in a fast decline as more cryptocurrencies and tokens rise up to take its place.
Other tokens and coins like Ether (ETH), Tether (USDT) and Binance Coin (BNB) have gained some foothold in the crypto payments space.
Bitpay mentioned that the use of Bitcoin for transactions in its platform went down from 93% in 2020 to 65% in 2021. This reflects a loss of almost 30%.
Throughout 2021, many crypto tokens were created on a daily basis. The year also saw the rise of meme coins and NFT tokens.
According to Bitpay, the users of its platform carried out 15% of their transactions with Ether (ETH), while stablecoins like USDT and USDC accounted for 13% of the payments.
Other newcomers like Shiba Inu (SHIB), Dogecoin (DOGE), and Litecoin (LTC) accounted for 3% of the payments. The rest of the payments were still made in BTC as mentioned above.
Interestingly, while the use of BTC for financial transactions suffered a reduction in 2021, the use of cryptocurrencies for payments increased especially for Bitpay.
Bitpay revealed an increase of 51% year on year in their total transaction volume for 2021. This is probably a result of the widespread popularization of cryptocurrencies and also of the acute rise in prices that the market experienced last year.
Speaking about this development, Bitpay’s CEO, Stephen Pair, told Bloomberg:
“Our business ebbs and flows to some degree with the price, when the price goes down, people tend to spend less. We have not experienced as much of a decline in volume with this recent pullback.”
Despite Bitpay being one of the most recognized crypto payments companies and managing large transaction volumes, it is still small compared to traditional payments companies like Visa and Paypal.
However, Bitpay’s CEO, Pair, believes the field is still young and the company is in a very good position for the future. He mentioned:
“We really like where we are strategically, this space is still very young. A lot of it has to do with what we think about timing. In the next couple of years, we are likely to see very substantial growth.”
Diversification is important, especially in the crypto industry. As more cryptocurrency technology with better use cases gets created, we expect people to quickly adopt them. A sector focused on decentralization and breaking monopolies cannot afford to have one.