Cryptocurrency payment processor BitPay Inc. made the news today after telling Bloomberg that payments using digital tokens have become a popular method of purchase. What is interesting, however, is that Bitcoin has recorded a declining dominance against altcoins, when it comes to payments.
Buying a new car in 2022? Here’s how to buy it with #crypto: https://t.co/fctI8V7KzW
– BitPay (@BitPay) January 6, 2022
Looking at last year’s data, the report cited merchants’ preference for Bitcoin. BitPay has seen a massive drop for Bitcoin from 92% in 2020 to around 65% in 2021.
Even so, the company has seen total payment volume in 2021 increase by 57% year over year.
Also, in the altcoin universe, Ether, stablecoins, and memecoins make up the main purchase tokens. In terms of total payments, Ether accounts for 15%, while stablecoins contribute 13% to the back end of cross-border payments. In addition, Dogecoin, Shiba Inu and Litecoin together account for 3%.
Consumer sentiment towards stablecoins is its steady value, while the meme has spiraled in price over the last year. Especially in the luxury segment as buyers use cryptocurrencies for items like jewelry and cars, along with gold, according to BitPay.
Gold is a surprise, especially since many are likely to see Bitcoin as the gold of the 21st century.
However, it is worth noting that its market has been affected by the recent price drop, one of the longest continuous drops since 2018. Notably, the luxury segment has also been affected. .
In fact, Stephen Pair’s CEO told Bloomberg that its business is affected by price. Explaining that when prices fall, people tend to spend less, he added,
“We didn’t experience much of a drop in volume with this recent pullback. It is probably just a reflection of more and more companies needing to use this as a tool to process payments.”
With names like PayPal, Starbucks, Etsy, and Overstock accepting Bitcoin, another competitor Bitpace commented that cryptocurrency can be beneficial for small and medium businesses. In addition to lower transaction fees and ease of cross-border payments, the payment gateway believes it is a way to enter a market of young buyers who see cryptocurrencies as a popular method among the younger generation.
However, more and more fintech companies and wallets are diving deep into the space. Citing examples of companies like PayPal Holdings Inc, Pair went on to say,
“This space is still very young. A lot has to do with what we think about time. Over the next few years, we are likely to see very significant growth. “
However, the volatility of the entire space cannot be denied. And, beyond that, there are still potential security and regulatory concerns.