The bitcoin network now handles more volume than online payments giant PayPal, according to the latest data.
Figures from blockchain insight firm Blockdata show that the bitcoin network processed an estimated average of $489 billion per quarter in 2021, compared to PayPal’s average of $302 billion per quarter.
Bitcoin’s figure is still a long way off that of other leading payments processors Mastercard ($1.8 trillion per quarter) and Visa ($3.2 trillion per quarter).
PayPal’s announcement last year that customers could buy, sell and spend bitcoin and other cryptocurrencies through its online platform, opened the digital assets up to more than 300 million customers and around 20 million active merchants around the world, and sparked the beginning of a price rally that has seen BTC rise in value by more than 400 per cent over the last 12 months.
Bitcoin’s transaction volume has been boosted by this surging price, which has nearly doubled against the US dollar in 2021.
“In theory, if bitcoin were to rise in price ~260 per cent today, to $245,000, then the bitcoin network would theoretically be processing an equivalent in volume to the Mastercard network on a daily basis,” Sam Wouters, a senior analyst at Blockdata, noted in a blog post.
“Price isn’t the only way for bitcoin to catch up though, and volume isn’t the only way to define the size of a financial network.”
The bitcoin network averages around 280,000 transactions per day on its base layer (not including layer 2 technologies like the Lightning Network), compared to around 366 million per day for Mastercard and 597 million per day for Visa.
“This is where the gap between the networks is staggering, but not without reason,” Mr Wouters wrote.
“There are many more credit card users than cryptocurrency users, and closing that gap will take time and a lot of education in how this new financial system works.
“A lot can change over the next years, and a conservative estimate of 2026 for bitcoin to grow to the scale of a network like Mastercard or Visa, may not be so overoptimistic after all.”
Bitcoin’s current market cap of $1.11 trillion is already more than value of Mastercard, PayPal and Visa combined.