New research has found that the annual transaction volume on the Bitcoin network surpassed that of some well-known card networks, such as American Express (AmEx) and Discover, during 2021.
The NYDIG Research Weeklyโs Jan. 29 report stated that Bitcoin processed $3 trillion worth of payments during 2021, placing it above popular credit card networks American Express ($1.3 trillion) and Discover ($0.5 trillion).
The report authors, NYDIG Global Head of Research Greg Cipolaro and Research Analyst Ethan Kochav, also found that the Bitcoin network had settled more transaction volume in Q1 2021 than โall credit card networks combined for the entire year.โ
โThis is astonishing growth, in our opinion, for a payment network that just had its 13th birthday,โ they wrote. American Express issued its first card in 1958, and Discover in 1985.
However, the Bitcoin network still has a way to go before catching up to Visa and Mastercard, which processed $13.5 trillion and $7.7 trillion in transactions, respectively.
It also should be noted that the study only looked at the $USD value of transaction volume, rather than the actual number of transactions. Therefore, itโs likely that most of the BTC transactions were simply users purchasing, swapping, and selling their BTC rather than using it to pay for anything.
While Bitcoinโs growth in transaction volume has not always been linear year-to-year, Cipolaro and Kochav said that it has โkept up at a torrid pace when looking at 5-year compound annual growth rates.โ
โAt the end of 2021, transaction volumes have been growing by nearly 100% annually over the past 5 years.โ
In Nov. 2021, a Blockdata report estimated that the Bitcoin network could potentially match the dollar value transferred on Mastercardโs network by as early as 2026. It also found that the Bitcoin network already processes more volume by dollar value than PayPal.
According to the report, the Bitcoin network processed about $489 billion per quarter in 2021, which is greater than PayPalโs $302 billion.
Related: Bitcoin overtakes PayPal on value transferred, sets sights on Mastercard: Report
The measure of Bitcoin transaction volumes doesnโt report the raw volume of on-chain transactions, but rather โrelies on statistical analysis by data providers (such as Glassnode) to remove transactions without economic substance.โ
The report includes โintra-entity transactions,โ which are transactions between addresses within the same wallet or owned by the same organization. For example, this might apply to a crypto exchange that is frequently moving Bitcoin around between different addresses. So, in other words โ the $3 trillion figure should perhaps, be taken with a pinch of salt.
