Research Report: The Market Size of the Cryptocurrency Payment Industry Will Reach Hundreds of Billions Within Three Years

Three Tracks Advancing Together, Market Size to Exceed 100 Billion by 2026

Cryptocurrency payments have broad application prospects in both the digital economy and the real economy. Since the "Bitcoin pizza purchase" in 2010, this industry has developed for over a decade, segmenting into key tracks such as deposit and withdrawal, off-chain payments in the real economy, and emerging blockchain-native scenario payments. Its development integrates the technology-driven characteristics of the tech field and the significant network effects of Web2 platforms, exhibiting a unique model in growth and competition.

Despite the bear market impact on the cryptocurrency market in 2022, the growth rate in the cryptocurrency payment sector remained unaffected. On one hand, well-known brands in the real economy, such as Starbucks, Coca-Cola, Tesla, and Amazon, have embraced cryptocurrencies, leading to a gradual increase in market adoption and consumer familiarity in the mainstream market. On the other hand, this market is attracting more and more participants. Additionally, an increasing number of countries and regions are beginning to include cryptocurrency payments within regulatory frameworks, with relevant laws and regulations gradually improving. For example, in 2022, the Monetary Authority of Singapore (MAS) approved payment service licenses for companies such as Circle, Paxos, Blockchain.com, Coinbase, Luno, Digital Treasures Center, Crypto.com, Genesis, and Sparrow. In February 2022, Colorado became the first U.S. state to accept cryptocurrency for tax payments. The Central African Republic became the second country to approve Bitcoin as legal tender after El Salvador, which adopted Bitcoin as its official currency in September 2021.

Based on the overall growth rate forecast of the global payment industry and a sensitivity analysis of cryptocurrency in the real economy payment sector, the report predicts that within the next three years, the global cryptocurrency payment market size will reach hundreds of billions of dollars.

"Compliance License + Merchant Resources" Regional Mixed Competition Model Difficult to Achieve "Monopoly"

After years of technological evolution, the usability and efficiency of cryptocurrency payments have been effectively improved, but security risks and mutual trust issues between transaction parties still urgently require more substantive solutions.

Moreover, due to the strong network effects in this field, the value of products or services increases with the number of users. Cryptocurrencies face fierce competition from traditional payment methods, which benefit from the network effects of existing users. Currently, the penetration rate of cryptocurrencies in the real economy payment sector is still less than 1%.

However, at the same time, leading projects have emerged in this industry. The report conducts a comparative study of representative projects such as Alchemy Pay and Moon Pay. It believes that the future "compliance license + merchant resources" regional mixed competition will be the main competitive model. In this scenario, a "monopoly" pattern will be difficult to achieve. Meanwhile, developing markets in Southeast Asia, South America, and other regions, where electronic payment methods have not yet taken root and have a large proportion of "digital natives," are expected to become breakthrough points.

Technological Innovation Drives Scenario Innovation, Connecting Upstream and Downstream of the Industry Chain

In terms of emerging blockchain-native payment scenarios, innovations in cryptocurrency payment models and technologies, including NFT Checkout, on-chain identity aggregation (DID), and flow payments, are being highlighted.

However, the NFT Checkout business is closely related to the speed at which the NFT market enters mainstream visibility and consumer feedback. Currently, the business volume is impacted by the downturn in the NFT market.

The cryptocurrency payment industry is still in a development stage and requires continuous innovation from market participants to gradually expand and penetrate more on-chain and off-chain scenarios. Technologies such as DID and flow payments are expected to empower new scenarios and provide new growth points for the industry. Additionally, the payment links and experiences in the cryptocurrency payment industry also need improvement. This requires market participants to explore and connect more with the upstream and downstream of the industry chain, providing more merchant-side modules, including financial management, reconciliation, and merchant onboarding.

The complete report of the "2023 Cryptocurrency Payment Industry Research Report" can be downloaded from the Bing Ventures website. Bing Ventures and Alchemy Pay hope to promote the understanding of this market among enthusiasts, entrepreneurs, and developers in the Web3 and blockchain fields through this report, allowing more people to engage in the opportunities and challenges of this domain.