The rise of Bitcoin payments: facts and analysis
Bitcoin stands in stark contrast to fiat money, which is entirely dependent on government policy and centrally controlled by state institutions.
According to CoinDesk, the number of Bitcoin wallets in 2015 was around 12 million. However, just ten years later, the number of Bitcoin users worldwide exceeded 300 million, indicating a rapidly growing demand for cryptocurrency.
Why is Bitcoin being used more often for payments?
The primary driver behind Bitcoin adoption is the inflationary nature of fiat currencies, which lose purchasing power over time.
Purchasing power reflects the number of goods and services that can be purchased with a certain amount of currency at a specific point in time. For example, according to the Bloomberg Dollar Spot Index, the U.S. dollar's purchasing power has dropped by 8% since the beginning of 2025. This decline is linked to:
- The introduction of new U.S. trade tariffs;
- A deteriorating balance of payments (according to the Bureau of Economic Analysis);
- Investor concerns about the dollar's status as the world's reserve currency.
According to government estimates from the Cost of Living Adjustment (COLA), the purchasing power of the U.S. dollar has declined by at least 35% over the past decade. In addition to inflation and economic indicators, the money supply also affects purchasing power.
Unlike fiat currencies, which banks can print in unlimited quantities, Bitcoin has a capped supply, and its issuance is predictable and slow (about 450 BTC per day).
At the current issuance BTC rate, miners will be able to generate only around 164,000 BTC annually over the next three years, roughly $19 billion at current prices. Over the next four years, this figure is expected to be halved due to the halving event, resulting in approximately 82,000 BTC annually, or around $9.5 billion as of mid-July 2025.
For comparison, over just two years starting February 2020, more than $5 trillion — or about a quarter of all existing dollars at the time — were printed, according to the U.S. Federal Reserve. The money supply rose from $15.45 trillion in February 2020 to $21.7 trillion by March 2022.
Growth of Bitcoin payments
In 2024, Bitcoin surpassed payment giants Visa and Mastercard in terms of daily transaction volume on its network. According to Glassnode, daily Bitcoin network transactions exceeded $46.4 billion, with over 500,000 transactions.
This figure accounts only for on-chain transactions. The actual volume, including crypto exchanges and payment systems supporting crypto (e.g., PayPal), remains unknown.
As early as 2023, BitPay reported that Bitcoin was among the most popular cryptocurrencies for transactions. According to BitPay, the Bitcoin payments market was valued at nearly $25 billion.
Estimates suggest that the Bitcoin payments market could reach $58 billion by 2034, with an annual growth rate of approximately 8.8%.
Key drivers of Bitcoin payment adoption include faster transactions and lower fees. As of July 2025, the average cost for a Bitcoin transaction is about 23 times cheaper than a fiat bank transfer.
Risks and opportunities of using Bitcoin for payments
One significant barrier to the widespread adoption of Bitcoin is its high volatility. Experts also cite legal uncertainty and the lack of clear regulatory frameworks for digital assets as substantial risks.
In some countries, such as China, Russia, and Saudi Arabia, Bitcoin is banned as a means of payment due to political reasons.
However, in many countries with unstable economies, Bitcoin serves as one of the few means of accessing financial services. In El Salvador, for instance — the first country to recognize Bitcoin as legal tender — around 70% of the population is unbanked. For these individuals, Bitcoin is a practical alternative to traditional financial products.
In El Salvador, the adoption of Bitcoin has yielded tangible benefits. According to President Nayib Bukele, recognizing Bitcoin in 2021 alongside other economic reforms led to a 10.3% GDP growth, partially due to increased foreign investment.
Still, about two-thirds of El Salvador's population initially opposed using Bitcoin alongside the U.S. dollar, which was the sole legal tender before the cryptocurrency was introduced.
In other countries, Bitcoin is seen as a hedge against hyperinflation. In Venezuela, for example, residents use Bitcoin to preserve their savings amid severe inflation. Chainalysis reports that over 10% of all remittances in Venezuela are conducted in Bitcoin.
In 2024 alone, more than 10% of Venezuela's population — approximately 2.9 million people — held and actively used cryptocurrency for transactions.