A recent study of BitRaffle revealed a significant decline in bitcoin payments, which dropped from 33.8% of total transactions on the platform to 15%. In contrast, Ethereum has gained popularity, now accounting for 28% of users and showing the highest average purchase price. The study attributes Ethereum’s rise to decentralized finance (DEFI) projects, initial coin offerings (ICOs), and the rising value of non-fungible tokens (NFTs). Additionally, stablecoins, especially those on Ethereum’s layer two solution, are gaining traction due to their scalability and low transaction costs. The findings highlight the changing landscape in crypto-payments, with consumers increasingly looking for alternatives to Bitcoin.
The cryptocurrency market has experienced a short-term downturn recently, yet analysts are optimistic about a potential ultision on the horizon. A study by BitRaffle, a leading crypto-commerce platform, has highlighted a remarkable shift in user payment preferences, revealing insights into the demand for various cryptocurrencies.
According to Matt Ahlberg’s research, Bitcoin’s (BTC) dominance in BitRaffle payments has dropped by a dramatic 55% compared to the previous quarter. In March, bitcoin accounted for 33.8 percent of payments, down from just 15 percent.
A shift in crypto payment preferences
The fall marks a changing landscape in the crypto-payment ecosystem, with alternative cryptocurrencies and stablecoins gaining popularity.
While Bitcoin’s payment share has declined, the Ethereum (ETH) ecosystem has seen significant growth. Ethereum users now represent 28% of the total users on BitRaffle, with the highest average purchase price among users. Ahlberg attributes this rise to the increased value gained from various DEDI projects, ICOs, and NFT projects associated with Ethereum.
In particular, stablecoins on Ethereum’s layer two solutions, especially Polygon (Metric), have outperformed their main-chain counterparts, underscoring the importance of scalability and low transaction costs in the crypto-payment space.
The Role of Legacy Coins and USDT
The study also highlights the continued popularity of “legacy coins” such as Litecoin (LTC), Dogecoin (Doge), and Dash (Dash), with Litecoin showing a steady uptrend on Butterflies. These coins benefit from their widespread availability on exchanges and wallets, making them an efficient medium of exchange.
Additionally, USDT on the Tron Network (TRX) has emerged as a major player in the crypto payment landscape. Despite a 350% increase in network fees since early 2023, USDT_TRC20 is the preferred crypto payment option, overtaking both Bitcoin and Ethereum, although the fee increase has slightly affected its share of payments for transactions under $10.
The rise of the electricity network
As transaction costs for major cryptocurrencies such as Bitcoin, Ethereum, and USDT on Tron exceed $1, users are increasingly looking for alternative chains and protocols. The Lightning Network has gained market share as a direct blockchain alternative to Bitcoin, although most payments are made from customer wallets and have a lower cost.
Ahlberg concludes that the increasing importance of compatibility and interoperability between chains and protocols is critical to the underlying value of each asset, as crypto activity continues to fragment across different platforms.
In summary, while Bitcoin’s dominance in payments has waned significantly, the crypto payment landscape is evolving, with the industry maturing alongside Ethereum and other alternatives.
FAQ: According to a BitRaffle study, Bitcoin’s payout dropped while Ethereum gained ground
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What does the BitRaffle study reveal about Bitcoin payouts?
- The study shows that bitcoin’s share of payouts on BitRaffle has dropped by 55 percent, down from 33.8 percent in the most recent quarter to just 15 percent.
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What is bit raffle?
- BitRaffle is a crypto-commerce platform that allows users to make purchases using various cryptocurrencies, providing insight into payment trends in the crypto market.
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Which cryptocurrency has seen a rise in payment shares?
- Ethereum (ETH) has gained ground, now representing 28 percent of total users on BitReffle and showing the highest average purchase price among users.
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What factors are contributing to the rise in popularity of Ethereum?
- Ethereum’s growth has been attributed to the increased value gained from decentralized finance (DEFI) projects, initial coin offerings (ICOs), and non-fungible tokens (NFTs) associated with the Ethereum ecosystem.
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How are stablecoins performing in the crypto payment landscape?
- Stablecoins, especially two solutions on Ethereum’s layer such as Polygon (Metric), are gaining traction due to their scalability and low transaction costs.
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What are “legacy coins”, and how are they performing?
- Legacy coins refer to established cryptocurrencies such as Litecoin (LTC), Dogecoin (Doge), and Dash (Dash). The study shows that Litecoin in particular is experiencing a steady uptrend on BitRef.
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What is the role of USDT in crypto payments?
- Despite recent increases in USDT network fees on Tron Network (TRX), the crypto has become a major player in the payment landscape, surpassing both Bitcoin and Ethereum in usage.
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What is the electricity network, and how is it being used?
- The lightning network is a second layer solution for Bitcoin that allows for faster and cheaper transactions. It is gaining market share as an alternative to Bitcoin’s main blockchain.
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How do transaction costs affect user behavior in crypto payments?
- As transaction costs for major cryptocurrencies exceed $1, users are looking for alternative chains and protocols, which has led to a shift in payment preferences.
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What does the study suggest about the future of crypto payments?
- The study shows that the crypto payment landscape is evolving, with increasing importance of compatibility and interoperability between different chains and protocols as platforms continue to fragment.