Bitcoin payments decline as other cryptocurrencies grow

BitPay Inc., one of the world’s most well-known crypto payments processors, has seen a shift in the type of digital assets used for purchases over the last year, according to a Bloomberg report.

According to BitPay, Bitcoin’s (BTC) usage at businesses that use its payment system fell last year to about 65% of processed transactions, down from 92% in 2020. Along with this change, Ether (ETH) represented 15% of all transactions, whereas other currencies such as Litecoin (LTC) and Dash have increased their portion.

Businesses have started using stablecoins more frequently for cross-border payments since November when crypto values had been depreciating. Consumers have also begun to use stablecoins because their value is constant, resulting in less risk in the notoriously volatile cryptocurrency market, as per the report.

The growing popularity of stablecoins has partly contributed to the use of alternative coins for payments. Dogecoin (DOGE), for example, became famous last year as the result of its followers, such as Tesla CEO Elon Musk, who announced on Friday that DOGE may be used to buy Tesla-related merchandise.

The trend suggests that individuals are holding Bitcoin rather than spending it. Bitcoin’s prices increased by 60% in 2021, regardless of the fourth quarter’s volatility. According to BitPay, the majority of last year’s crypto transactions were in luxury items such as jewelry, watches and automobiles.

Transaction volumes for high-end items increased 31% in 2021 from 9% in 2020, according to Stephen Pair, CEO of BitPay. Payment volume rose by 57% across the board in 2021.