Cryptocurrency payments are becoming more and more popular. Crypto expert Camille Lemmens shares 5 cryptocurrencies to watch out for. She also offers an in-depth look at how these perform, she.
Crypto payments see serious growth in 2021
cryptocoin.comAs you follow, the crypto money scene has grown a lot in 13 years. As a result, many crypto holders want to use their crypto for payments. We’re also seeing more businesses adopting crypto payments. They are playing with this demand. So, let’s take a look at the current crypto payments and 3 popular tokens for payments.
CoinPayments has released a report on crypto payment trends. This report includes the top 5 cryptocurrencies used for payments. This article covers BTC, USDT and LTC. Two other popular cryptocurrencies are ETH and DOGE. All data mentioned in this article is from the CoinPayments report. What we are seeing is that both crypto holders and businesses want to use crypto as a payment option. We are already seeing big companies accepting crypto payments. For example, PayPal, Microsoft or Twitch. Not to mention El Salvador, which was the first country to accept Bitcoin as legal currency.
So, how does this affect crypto payments? What we’re seeing is a growing demand for crypto payments. Both large companies and small retailers want to be involved. However, transactions fell 17.92% in 2021. However, if we add the first quarter of 2022, we see an increase of 32.52%. If we look at the volume, everything looks green there. In 2021, there was a 44.67% increase in CoinPayments. If we add Q1 2022, it’s just under 100% (99.98%). In other words, CoinPayments doubled in volume from the beginning of 2021 to the end of the first quarter of 2022.
Both consumers and businesses seem to be moving away from viewing crypto as an asset class. Just like bonds or gold. Now they see it more as a currency to spend. Therefore, it is time to take a look at which cryptocurrencies traders and consumers are using.
What are the top 5 cryptocurrencies used for payments?
The top 5 cryptocurrencies used for payments are BTC, USDT and LTC, ETH and DOGE. CoinPayments compared the first quarter of 2021 to the first quarter of 2022. We’ve seen some interesting results between BTC and USDT in both transactions and volume. We see a trend in the volume and number of transactions. Either way, it shows that Bitcoin has lost ground and USDT has taken the lost ground. Also, the change shows that people are no longer willing to spend their BTC as much as they used to. USDT stablecoin is now a much more attractive alternative.
The leading cryptocurrency Bitcoin (BTC) is in the first place.
Bitcoin is the OG of all cryptocurrencies. P2P allows electronic transactions. It was released in 2009 and Satoshi Nakamoto designed it. Nakamoto, however, is a nickname for one or more people. We don’t know who they are. It uses blockchain technology and is exchangeable. Meanwhile, the supply of BTC is limited. There will be only 21 million BTC. P2P setup eliminates all middlemen. Censorship resistant. In other words, no government, bank or other organization can control it.
Bitcoin has been the dominant cryptocurrency in the market since its launch. It leads all other cryptocurrencies in market capitalization. For more than a decade, it has been the most used cryptocurrency for payments. However, this seems to be about to change.
Bitcoin payment volume
In the first quarter of 2021, BTC was good for almost 75% of the volume. However, that fell to 35% in the first quarter of 2022. It grew from three-quarters to one-third of CoinPayments in total volume. Within a year, that’s a 38.5% drop. This is a pretty drastic change. It shows that Bitcoin has lost its dominant position.
Bitcoin transaction counts
If we look at the number of transactions in the same period, there is a similar situation. By early 2021, BTC had a 53.6% market share of all CoinPayments transactions. This fell to 30.24% in the first quarter of 2022. However, Bitcoin remains in the top 5 of the most used cryptos for payments. Bitcoin looks scarce and we’re seeing results. Bitcoin holders prefer to hodl rather than spend their BTC. They prefer other cryptos as payment option.
In second place is the stablecoin Tether (USDT).
USDT is currently the most popular stablecoin. It was launched in 2014 as RealCoin. However, four months later it was already renamed Tether. USDT is secured by fiat. It is pegged 1:1 to the US dollar. U.S. treasury bills, cash, and secured loans, among others, buy back Tether.
The idea behind USDT is to offer a stable and transparent stablecoin. It also offers low transaction costs. Not only is it the most popular stablecoin on the market, it’s also #1 in crypto payments. Moreover, they also have the first mover advantage.
Tether payout volume
In the first quarter of 2021, they cut only 10% in total volume. However, they dominate this segment with 46.7% in the first quarter of 2022. This is almost half of the total payment volume and an increase of 36.6%. Average monthly growth was around 9%. This was enough to get the top spot from Bitcoin.
Tether transaction counts
In the number of transactions, Tether managed a stunning 8.6x between the two quarters. It increased from 4.1% to 35.3%. Most of this increase is during the 4th quarter of 2021 and the first quarter of 2022. Both traders and consumers seem to have a soft spot for Tether. Both sides have drifted away from BTC and towards Tether.
In last place is Litecoin (LTC).
Charlie Lee founded Litecoin in 2011. It started as a Bitcoin fork. Just like Bitcoin, it’s a P2P electronic cash system. Lee calls Litecoin the ‘lite version of Bitcoin’. It also compares LTC to silver and BTC to gold. However, there are some differences. For example, LTC has 84 million tokens, about 4 times more than Bitcoin. New blocks arrive 4x faster at 2.5 minutes compared to BTC’s 10 minutes.
By far the largest US exchange, Coinbase has offered LTC almost from the start. As a result, Americans have a long history with this cryptocurrency. They feel comfortable using it. It’s also an old project, at least in terms of crypto. All these factors contribute to LTC being in this top 5.
Litecoin payment volume
Although Litecoin does not come close to the top 3 in terms of volume, its volume has grown. The first quarter of 2021 saw a 2% presence. By contrast, the first quarter of 2022 saw 7.5% in volume. In 2021, its volume increased by 2.69 times. However, this fell slightly in the second quarter of 2022.
Litecoin transaction counts
Litecoin has also seen a bullish trend in transactions. It increased from 9.5% to 13.5%. Not as strong as volume, but still in an uptrend. However, if we compare the fourth quarter of 2021 with the first quarter of 2022, we see a 3.5% decrease from 17% to 13.45%. Litecoin has grown despite having a small market segment. It looks like Litecoin will stay in the top 5 for the foreseeable future.
Other cryptocurrencies
Maybe you are missing your favorite cryptocurrency payment option on this list. Although CoinPayments offers 175 other cryptocurrencies for payment, it did not make it to this list. The reason is simple, they do not have volume and transaction numbers.
Other cryptocurrency payment volumes
Still, they achieved a 2.8% market share by volume. With this they managed to beat DOGE only in the top 5. In 2021, the 2nd, 3rd and 4th Quarter saw an increase. But most likely Tether crushed it in the first quarter. About 6% and 8%, respectively, and over 6% in Q4. It was seen at over 3% in the first quarter in 2021 and almost 3% in 2022.
Other cryptocurrency transactions
They had a 5.5% share in transactions. This even surpassed Tether with a 4.1% share. However, that fell to 3.7% in the first quarter of 2022. Despite the low numbers, this is still a niche market. It is not impossible for a cryptocurrency from this group to enter the top 5 one day.
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