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Merchant Use of Bitcoin As Payment Method Dropped by 27 Percent in 2021 – Bitpay

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Bitpay one of the leading crypto payment service provider reported a decline in Bitcoin’s dominance in crypto payment methods in 2021. According to Bitpay, merchant use of Bitcoin has dropped by 27 percent from 92 percent recorded in 2020 to about 65 percent in 2021.

Bitpay revealed that merchants are increasing the use of other cryptocurrencies to process their payments on its platform. Ethereum now accounted for 15 percent of the total transactions, stablecoins accounted for 13 percent while two leading meme coins, Dogecoin and Shiba Inu coin with Litecoin accounted for 3 percent of total transactions in 2021.

The decline in the use of Bitcoin was partly due to the rise and acceptance of stablecoins for cross-border payment, likewise, unlike bitcoin where the price is not stable, the value of stablecoins is steady irrespective of the market trend.

Despite the volatility in the crypto market in the last quarter of 2021, Bitcoin price rose by 57.64 percent from $29,374.15 it traded on 1st of January, 2021 to $46,306.45 it closed on 31st of December 2021. However, the volatility did not deter investors from holding on to the Bitcoin in their wallets.

BitPay founded in 2011, processes an average of 66,000 transactions per month and $1 billion in annual transactions with over 80 employees. Chief Executive Officer Stephen Pair said the company’s overall 2021 payment volumes rose 57 percent year over year.

Pair Said, “our business ebbs and flows to some degree with the price, when the price goes down, people tend to spend less, we have not experienced as much of a decline in volume with this recent pullback. It’s probably just a reflection of more and more companies that need to use this as a tool to conduct payments.

As merchants begin to accept crypto payments, more companies are also stepping in, indicating the growing adoption of crypto in the payment industry. Last week, Investors King reported that PayPal was planning to launch its own stablecoin called PayPal Coin.

Pair said, “PayPal getting into this space has been great for our business because it causes companies to start asking the question of should they accept crypto payments”.

Bitcoin is 37.87 percent down from its All-Time High of $68,789.63 traded on the 10th of November 2021. At press time Bitcoin is down by 1.25 percent trading at $42,566.12

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Bitcoin, Other Cryptocurrencies Rebound on Thursday

Bitcoin, the world’s most dominant cryptocurrency, appreciated by 4.53% in the last 24 hours to take its gains to 12.64% in the last 7 days.

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The cryptocurrency space came alive in the last 24 hours to extend its gains for the week despite growing global uncertainties amid recession fears.

Bitcoin, the world’s most dominant cryptocurrency, appreciated by 4.53% in the last 24 hours to take its gains to 12.64% in the last 7 days.

In the last 7 days, Eth, the token of the Ethereum protocol, has gained 21.36% from about $1000 a coin it traded a week ago to $1,235.67 on Thursday.

Similarly, BNB extended its gains to $242.45, an increase of 1.40% in 24 hours and 14.33% in the last 7 days to underscore a possible shift in the financial markets towards cryptocurrency, especially with global assets, both traditional haven assets like gold and even risk assets like stocks, commodities, etc, trading at a record-low.

Bitcoin and other cryptocurrencies crashed after Luna stablecoin plunged from over $40 billion market value or $90 a coin to about $800,000 in market value or $0.00004 a coin. The huge decline and the speed in which it happens, three days, sent a shocking wave to the investment world and alerted people to the danger of investing in an unproven and regulated space like cryptocurrency.

However, seasoned traders have said it is not unique and newbies would have to learn that in cryptocurrency investing, there are bearish and bullish seasons. This, they attributed to the Bitcoin Halving, a process in which Bitcoin reward for miners is halved after every 210,000 blocks or four years.

Still, experts like Changpeng Zhao, the Chief Executive Officer of Binance and the richest cryptocurrency investor alive, had called on people to only invest in cryptocurrency projects with real-world use cases.

Popularly known as CZ and estimated by Bloomberg to have a net worth of $96 billion, had repeatedly said the cryptocurrency space is here to stay and encourages inventors and innovators to focus on solving real-life problems.

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The Media Hasn’t Been Entirely Fair to Bukele’s Bitcoin Gambit

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Most members of the media have considered the negative components of President Nayib Bukele’s Bitcoin Gambit in El Salvador. It is true that the value of Bitcoin has tumbled since the president first bet big on the cryptocurrency. It is true that the IMF and lenders look at the country’s economic policy with extreme distrust, and agencies have dropped the country’s credit rating. It is true that the country has over a billion dollars in debt payments due over the next twelve months. If you look at how things have played out this far, you could say that it hasn’t quite gone as Bukele has hoped. In fact, many have said that.

But, let’s be pragmatic. Estimates show that the country has spent $374 on the Bitcoin gambit, in totality. A $50 million unrealized loss on Bitcoin holdings, in a country with a $29 billion economy, is less than a half percent of the national budget. But that unrealized loss is unrealized for a reason. President Bukele is doubling down on Bitcoin. He’s even bought the dip. He understands that this drawback is due to macroeconomic conditions, not the least of which being staggering inflation due to massive pandemic-related spending packages. Then, there’s an unpredictable war in Eastern Europe, not to mention the ongoing supply chain issues, still lingering from Covid shutdowns.

Those things have rained hellfire onto the digital assets space, but so, too, have they affected the traditional markets. The Dow Jones lost 1100 points in a single day of trading last month. Bukele knows that Bitcoin will bounce back. His investment in Bitcoin is one which is long-term. That said, he’s up for re-election in 2024 and continues to boast high approval ratings, thanks, in part, to his tough-on-crime stances.

The truth is that the economy in El Salvador has long been plagued by unfavorable conditions. The country has long paid a premium for its debt. In the country’s most recent credit downgrade, Fitch maligned the country’s “uncertain access to multilateral funding and external market financing given high borrowing costs,” in addition to its “limited scope for additional local market financing.”

But, let’s consider that. El Salvador has long had precious few major opportunities. Through the Bukele’s Bitcoin Gambit, the country has re-emerged on the global scene. While the move to Bitcoin was aimed at bringing the majority unbanked population into the modern financial scene, that takes time and consumer education. What the country has seen, immediately, is external interest. That, in and of itself, is significant, considering that, not long ago, El Salvador was more dangerous than Afghanistan.

Gambit — a term that many may only be familiar with from the recent Netflix hit, The Queen’s Gambit. But the definition, in part, says: an “opening remark, typically one entailing a degree of risk, that is calculated to gain an advantage.” Bukele put his country on the map again. Sure, there are real risks. Significant risks. It may well be the final nail in the country’s bid for a billion-plus dollar loan from the IMF. However, he has propelled El Salvador into the spotlight, creating a culture of innovation which is tech friendly and forward focused. Unfortunately, Bukele’s gambit launched right before a massive downturn in the markets, driven by investor fear. However, the cause doesn’t matter. Whether Bukele will be regarded as a forward-thinking leader is entirely dependent on Bitcoin’s turnaround.

There’s little doubt that Bitcoin will, indeed, turn around. But, timing is everything. Until then, there’s much to be said for the tourism boost that the tiny Central American country has received. Tourism is up 30% since Bitcoin became legal tender. The administration has planned a Bitcoin City, complete with mining powered by a volcano. Granted, the project is on hold due to market conditions, but El Salvador has a number of irons in the fire that they didn’t have three years ago.

In their cryptocurrency wallet rollout, only 20% of users continued to use the wallet after they spent their $30 in Bitcoin given to them by the government, but many argue that was due in large part to a poor user experience within the wallet. There’s a great deal that the country must work on, even within the master Bitcoin plan. Beyond it, it must find a way to begin to balance their budgets and continue to lower crime rates. However, if Bitcoin bounces back, and if the country can bring in significant external investments, many may look back at this gambit in a positive light. There are many opportunities to exploit, once the market begins to correct. In addition to the tourism angle and the mining apparatus, if the country continues to work on its economic fundamentals and infrastructure, it could see interest as a jurisdiction which is friendly to fintech and other cutting-edge innovations.

Sure, there’s a lot of risk here. And President Bukele has suffered the consequences of pretty poor timing. However, the gambit isn’t over until his political shelf-life wears out. And, right now, it doesn’t appear that will be in the near-term.

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80,000 Bitcoin Owners Lost Millionaire Status In 2022 Crypto Crash

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Data from BitInfoCharts revealed that a total of 108,886 Bitcoin (BTC) addresses owned over $1 million worth of bitcoin during its all-time high of  $68,789.63 on November 10, 2021. However, following the bearish market trend in the crypto space over 80,000 BTC addresses have lost their millionaire status with bitcoin hovering around $19,000.

The report revealed that only 26,284 BTC addresses hold over $1 million worth of bitcoin, this implies that the downward trend in the crypto market has significantly reduced the number of bitcoin millionaires by more than 75 percent in the last nine months.

The crypto bearish trend also saw the number of whales with more than $10 million worth of bitcoin decline from 10,587 BTC Addresses to 4,342 BTC Addresses.

Despite the decline in the net worth of former BTC millionaires, the bear market has seen more than 13,000 new “wholecoiners” — a wallet that contains one or more BTC — added to the market, bringing the total number of wholecoiners to just over 860,000. This significant spike in the number of whole coiners would suggest that retail investors are accumulating large amounts of BTC while prices tank.

Adding further credibility to the retail accumulation narrative, more than 250,000 addresses have added 0.1 BTC, or $2,000 or more to their holdings over the past 20 days, according to data from Glassnode.

Bitcoin and the rest of the digital asset market have been negatively impacted by a number of different issues, including increased regulatory scrutiny, sustained geopolitical unrest, rising inflation and interest rate hikes.

Due to the increasing uncertainty around the stability of global markets, commentators seem to agree that the price of risk assets like Bitcoin could continue to suffer over a longer time frame.

At the time of writing, Bitcoin is trading at $19,143.45 down 4.74 percent in the last 24 trading hours.

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