BitPay is a cryptocurrency payment processing company that allows customers to pay for goods and services using cryptocurrencies. When a customer chooses to pay using crypto, BitPay converts the payment into a fiat currency and pays the merchant directly, managing the volatility of the cryptocurrency on behalf of the payor. The company charges a flat rate for its services and currently processes around USD 1 billion in payments annually. BitPay is the world's largest crypto payment processor.
Bitcoin's history offers valuable lessons. In the early days of cryptocurrency, it was primarily used on the Silk Road, an online marketplace for illegal goods and services, due to its combination of anonymity and security. As Bitcoin's popularity grew, its value increased, and it gradually became recognized as a legitimate form of currency. Now, nearly a decade later, Bitcoin is primarily seen as a store of value. This evolution highlights the potential for cryptocurrencies to change and adapt over time.
In November 2022, Litecoin is following a similar trajectory to that of Bitcoin a decade earlier. Like Bitcoin, Litecoin is beginning to gain recognition as a legitimate form of currency, with companies like BitPay offering support for it. The below graphics show Litecoin's standing in the market:
Litecoin is currently the second most widely used cryptocurrency on BitPay, with a market share of 27.64% of total payment count. To understand the true impact of market acceptance, it is necessary to look at the details. This article compares the total number of transactions made using Litecoin on BitPay in November 2020, November 2021, and November 2022 using publicly available data. The sources for this data are listed at the end of the article.
By looking at the above chart we can summarize the following:
BitPay’s total number of crypto transactions increased from 80,500 in November 2020 to 88,347 in November 2022.
Bitcoin’s dominance as the preferred medium of payment dropped from 79% in November 2020 to 41.62% in November 2022. The total number of transactions registered by Bitcoin was 63,595 in November 2020 but this number dropped to only 36,770 in November 2022 despite the growth in total number of crypto transactions. Coincidentally, the number of transactions made using Bitcoin as a percentage of total number of transactions on BitPay is close to Bitcoin’s current market dominance (40%).
Litecoin’s total number of transactions was 24,419 in November 2022 vs 11,681 in November 2021 vs virtually 0 in November 2020 (Litecoin was only introduced on BitPay in July 2021). Litecoin’s phenomenal growth rate is attributed to BitPay’s total number of crypto transaction growth.
On BitPay, Litecoin’s trajectory is projected to equal Bitcoin’s number of transactions by end of 2023. One would expect the LTCBTC ratio to strengthen AND Bitcoin’s dominance to continue declining.
Litecoin complements Bitcoin by serving as a medium of payment on platforms like BitPay. As Litecoin gains acceptance, it will likely also transition to being seen as a store of value. This shows the potential for Litecoin to continue growing and evolving in the future.