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(Kitco News) – Bitcoin continues to attract many investors’ attention to its recent new high above $ 61,000; However, one company says that the cryptocurrency market is more than just a momentum trade with increase in crypto spending.
According to a recent internal report by the largest crypto-payment processor CoinPayments in the world, from the first quarter of 2019 to the fourth quarter of 2020, the North American cryptocurrency market experienced a 300% increase in transactions as more businesses and traders have adopted digital currencies.
“Cryptocurrencies continue to strengthen their role in the global financial landscape. Consumers are seeing real value in the market and using it more and more in their daily lives,” CoinPayments CEO Jason Butcher told Kitco News. “We are seeing the beginning of a larger trend for cryptocurrencies.”
CoinPayments’ research shows that the top three digital currencies in North America are Bitcoin (BTC), Ethereum (ETH) and Litecoin (LTC). Despite the dominance of these three cryptocurrencies, the company also noted that the transaction volume in Tether (USDT) has increased ninefold over the past two years.
The latest rise in Bitcoin has raised the digital currency’s market capitalization to more than $ 1 billion. Meanwhile, CoinPayments said the total transaction volume for Bitcoin in North America rose to $ 153.65 million in the fourth quarter of last year.
Not only are transaction volumes increasing, but average transaction sizes are also increasing, which could mean people have more confidence in cryptocurrencies, according to Butcher.
If we look at the sectors that are pulling the most flow, the average crypto transaction size for financial services was $ 531 in the fourth quarter of 2020, which is 41% higher than the first quarter of 2019.
Many analysts have noted that Bitcoin attracts a lot of investment demand as investors seek alternative assets to protect against the rising inflation threat. Some analysts have pointed out that Bitcoin’s run – with more than 100% increase so far this year – has taken away some luster of gold, which is seen as a more traditional inflation hedge.
“Not only do cryptocurrencies effectively protect your wealth, but consumers can also use it as a global currency,” Butcher said.
As a leader in the crypto space, Bitcoin has achieved some important milestones. Its market value not only reached $ 1 trillion, but exceeded the Dow Jones Industrial Average market capitalization earlier this year.
Mike McGlone, senior commodity strategist at Bloomberg Intelligence, said in a recent report that the rising value of Bitcoin is just beginning. He added that he sees the potential for Bitcoin to surpass Amazon’s market value.
“Well, on the way to a global digital reserve asset, there is enough potential for Bitcoin to achieve a higher market capitalization than the single dominant company,” McGlone said in the report.
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