NYDIG research shows Bitcoin network surpasses American Express in transaction volume

  • Bitcoin has emerged as the third-largest transaction processing network for the year 2021.
  • The transaction volumes on Bitcoin have been growing, reaching over 100 percent annually over the last five years.

Last week, NYDIG analysts published a report providing key insights into the transaction volumes on the Bitcoin network for the last year of 2021. The report shows that during the entire 2021, the total transaction volume on the bitcoin network was much higher than some of the well-known card networks such as American Express.

The report shows that in 2021, the Bitcoin blockchain processed $3.0 trillion in total transactions. This was double that of American Express’ 1.3 trillion. However, leading payment giants like Visa and Mastercard still continue to dominate the payments industry. The report authored by research analysts Greg Cipolaro and Ethan Kochav notes:

This is astonishing growth, in our opinion, for a payment network that just had its 13th birthday. The major card networks have multi-decade histories — Visa was launched in 1958, Mastercard in 1966, American Express issued its first card in 1958, and Discover in 1985.

The study shows that the analysts have only considered the U.S. Dollar value of transactions rather than the actual number of transactions. Thus, there’s a higher likelihood that most of the BTC transactions were simply related to users purchasing, swapping and selling their BTC instead of using it to pay for anything.

Bitcoin’s transaction volume growth

The research notes that Bitcoin has witnessed a significant jump in transaction volumes. However, this hasn’t been a linear growth for the world’s largest cryptocurrency. The researchers wrote:

Bitcoin has kept up at a torrid pace when looking at 5-year compound annual growth rates. At the end of 2021, transaction volumes have been growing by nearly 100% annually over the past 5 years.

The researchers noted that rather than seeing Bitcoin every time as a Digital Gold, think of it as a payments system first. “As a payment rail, Bitcoin is probably larger and growing faster than most might realize,” they wrote.

The researchers note that the Federal Reserve’s stand on quantitative tightening has recently impacted risk assets. America is currently witnessing three-decade high inflation and the Fed is looking for more rate hikes and tapering of bond purchases.

This has put severe pressure on the equity and crypto markets. As we have seen, the crypto market has been under severe correction since the start of 2022. The researchers add:

The Federal Reserve’s FOMC meeting on Wednesday was once again a price-moving event for bitcoin and other risk assets. Risk assets had sold off leading into the meeting, leading us to write earlier this week that we may get a relief rally if the Fed’s posture was within expectations.

Bitcoin as an ecosystem continues to expand. There’s certainly more retail and institutional participation in Bitcoin than it was ever before.

About Author

Bhushan is a FinTech enthusiast and holds a good flair for understanding financial markets. His interest in economics and finance draw his attention towards the new emerging Blockchain Technology and Cryptocurrency markets. He is continuously in a learning process and keeps himself motivated by sharing his acquired knowledge. In his free time, he reads thriller fictions novels and sometimes explores his culinary skills.

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