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(Kitco News) – Bitcoin continues to attract a lot of investor attention after its recent rise above $ 61,000; however, one company says the cryptocurrency market is more than just dynamic trading, with crypto spending on the rise.
According to a recent internal report by the world’s largest crypto processor, CoinPayments, from the first quarter of 2019 to the fourth quarter of 2020, the North American cryptocurrency market saw a 300% increase in transactions as more companies and merchants adopted digital currencies.
“Cryptocurrencies continue to solidify their role in the global financial landscape. Consumers see real market value and are using it more and more in their daily lives,” said Jason Butcher, CEO of CoinPayments, to Kitco News. “We are seeing the beginning of what will be a major trend for cryptocurrencies.”
CoinPayments research shows that the top three digital currencies traded in North America are Bitcoin (BTC), Ethereum (ETH) and Litecoin (LTC). Despite the dominance of these three cryptocurrencies, the company also noted that the volume of transactions in Tether (USDT) has increased nine times in the past two years.
Bitcoin’s latest rise has raised the market capitalization of digital currency to more than $ 1 trillion. Meanwhile, CoinPayments said the total transaction volume for Bitcoin in North America increased to $ 153.65 million in the fourth quarter of last year.
Not only are transaction volumes increasing, but the average transaction size is also growing, which may mean that people rely more on cryptocurrencies, according to Butcher.
When looking at the sectors that are attracting the most flows, the average size of cryptographic transactions to pay for financial services totaled $ 531 in the fourth quarter of 2020, an increase of 41% over the first quarter of 2019.
Many analysts have noted that Bitcoin is attracting high investment demand as investors look for alternative assets to hedge against the rising threat of inflation. Some analysts have pointed out that the Bitcoin rush – with more than 100% gains so far this year – has taken some of the shine out of gold, which is seen as a more traditional inflation hedge.
“Cryptocurrencies not only effectively protect their wealth, but consumers can use it as a global currency,” said Butcher.
As a leader in the cryptographic space, Bitcoin has achieved some significant milestones. Not only did its market value reach $ 1 trillion, but earlier this year, it exceeded the market capitalization of the Dow Jones Industrial Average.
Mike McGlone, senior commodities strategist at Bloomberg Intelligence, said in a recent report that the rise in Bitcoin’s value is just beginning. He added that he sees potential for Bitcoin to overtake Amazon in market value.
“Well, on the way to becoming a global digital reserve asset, there is a lot of potential for Bitcoin to achieve greater market capitalization than the only dominant company,” said McGlone in the report.
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