Altcoins Are Encroaching On Bitcoin’s Dominance On Digital Payments
January 17 2022 - 6:00PM
NEWSBTC
Bitcoin has dominated the digital payments space for the longest
time and continues to do so. However, this dominance is on the
decline as more altcoins are being chosen as the preferred digital
currencies for payments. This has mainly been due to cheaper fees
resulting from network congestion when the price gets too high.
Instead, cryptocurrencies whose fees can range from a few cents to
fractions of a cent are now favored by merchants. Altcoins Are
Taking Market Share From Bitcoin Crypto payments processor BitPay
recently released a report outlining the percentages each crypto
commanded in the crypto payments space. As expected, Bitcoin
dominated the list but what was important to note from the report
was how much the pioneer cryptocurrency’s dominance over this space
dropped in the space of a year. Between 2020 and 2021, bitcoin lost
about 27% dominance. Related Reading | Why Sovereign Nation
States May Begin Acquiring Bitcoin In 2022 Back in 2020, the
company had reported that bitcoin made up for 92% of all digital
payments being carried out on the platform. In 2021, this number
was at 65% and is expected to continue to drop as merchants move to
altcoins for payments. Bitcoin market dominance down below 40% |
Source: Market Cap BTC Dominance on TradingView.com The use
of Ethereum as a payment method was up, accounting for 15% of the
total transactions carried out on the platform. Stablecoins made a
big splash with 13% of all transactions. Meme coins, which grew to
popularity within this time and were added by the payments
processor amid rising demand, made up a small but impressive
percentage of all transactions. Dogecoin and rival Shiba Inu,
alongside Litecoin, accounted for 3% of digital payments processed
by BitPay for the year. Stablecoins On The Rise One of the factors
that affect how much users are paying with cryptocurrencies has
been the fluctuations in price. For Cryptocurrencies like bitcoin,
when the price of the digital asset moves up, the frequency in
which it is being used as a method of payment increases
drastically. And vice versa during the bear markets. But with
stablecoins, whose values more or less remain the same through bull
and bear markets, merchants are able to eliminate this problem.
BitPay noted that the use of stablecoins as a method of payment
when using digital currencies has gone up tremendously. Related
Reading | What’s In Store For MicroStrategy Going Forward? CEO
Michael Saylor Reveals However, the tide seems to be changing when
it comes to the correlation between bull/bear markets and how much
users are spending their cryptocurrencies. CEO and founder of
BitPay, Stephen Pair, stated that the recent pullback in crypto
prices has not affected payments as much as it did in previous
markets. “We have not experienced as much of a decline in volume
with this recent pullback,” Paid said. “It’s probably just a
reflection of more and more companies that need to use this as a
tool to conduct payments” The company which processes around 66,000
transactions a month is one of the largest crypto payments
processors on the globe. It processes crypto transactions for
prominent companies such as AMC Theaters and the Dallas Mavericks.
Featured image from Ethereum World News, chart from TradingView.com
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