Bitcoin is the leader in digital payments for the longest period of time. This dominance is waning as altcoins become more popular digital currencies. It is mainly due to lower fees that result from network congestion that occurs when price rises. Merchants now favor cryptocurrencies, which can have fees as low as a fraction of a penny to a few pennies.
Altcoins are taking market share from Bitcoin
BitPay is a cryptocurrency payments processor and recently published a report detailing the percent of cryptos that each one commanded within the crypto payments market. 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. Bitcoin lost 27% of its dominance between 2020 and 2021.
Why Sovereign Nation States May Begin Acquiring Bitcoin In 2022| Why Sovereign Nation States May Begin Acquiring Bitcoin In 2022
The company reported in 2020 that 92% of digital payments made on the platform were bitcoin. This number dropped to 65% in 2021 and will continue to fall as more merchants switch to altcoins to pay their bills.
Source: Market Cap BTC Dominance on TradingView.com| Source: Market Cap BTC Dominance on TradingView.com
Ethereum was used as a payment medium for 15% of all transactions. Stablecoins were a huge success, accounting for 15% of total transactions.
Meme coins have a modest but significant percentage of transactions. They gained in popularity over time. BitPay processed 3% in digital payments last year, with Shiba Inu and Dogecoin.
Stablecoins are on the Rise
Price fluctuations are one of the main factors that influence how much cryptocurrency users pay. The price fluctuations of cryptocurrencies such as bitcoin can have a dramatic impact on how often they are used for payment. During bear markets, it is the reverse.
Stablecoins have stable values, meaning that their value will not change in both bull or bear markets. Merchants can solve this issue with them. BitPay observed that stablecoins have been used as payment methods for digital currencies in a significant increase.
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The tide is changing in the area of the correlation between bear/bull markets and the amount that users spend their cryptos. Stephen Pair, BitPay’s CEO, said that recent volatility in cryptocurrency prices hasn’t affected payment as significantly as in the past.
“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”
This company processes 66,000 transactions per month, making it one of the biggest crypto payments processors worldwide. The company processes transactions in crypto for companies like AMC Theaters or the Dallas Mavericks.
Featured image taken from Ethereum World News.