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When cryptocurrency prices rise, spending may dip, but only for a short time before users accelerate their purchases with Bitcoin and other digital coins, according to a report released Thursday by BitPay Inc., an Atlanta-based payments-service provider for crypto users and crypto-accepting merchants.
The ”2024 BitPay Spending Report,” which covers the year’s first quarter, indicates payments volume on all cryptocurrencies tracked by the company rose 20% from Jan. 1 through March 31. This was despite a short-lived dip mid-quarter in the wake of a runup in Bitcoin’s value.
While some of the expected high-end categories, such as precious metals and cars and boats, lodged double-digit surges in payments volume, other, more mundane niches also rose significantly, the report indicates. The electronics category, for example, rose 64%, while airlines and aviation was up 27%, the BitPay report indicates.
Total spending in dollar terms was not immediately available. But the average transaction value for Bitcoin was $1,009, indicating the coin remains a tool for big-ticket spending. A competing digital currency, Ethereum, registered a much lower average ticket, at $613, according to the report. Ethereum is second only to Bitcoin in terms of market capitalization in dollar terms. Paying bills and other debts remains a top application, the report indicates, with credit card payoffs accounting for the biggest share (85%) in this category.
The United States remains the leading cryptocurrency market in terms of spending, followed by Germany and France, but the report’s breakdown shows which states account for most of the U.S. payments volume. This league table is led by California, followed by New Jersey, Texas, Florida, and New York.
As it turns out, gift cards have become a popular target of crypto spenders, with cards from Home Depot, Best Buy, and Uber among the most popular. The cards become particularly in-demand following runups in crypto values, according to BitPay.
The report’s first-quarter coverage predates the effects of the April 19 halving event in the Bitcoin world. This event, which is built in to Bitcoin’s code, automatically reduces the miner’s reward by half at roughly four-year intervals.
The halving is meant to fight inflation by reducing Bitcoin supply. How the latest event may have affected retail spending with Bitcoin isn’t yet clear.
Bitcoin remains by far the leading cryptocurrency, with a $1.21 trillion market capitalization, according to Coinmarketcap.com, which tracks thousands of crypto coins. The coin, whose value remains volatile, is trading around $61,000, more than double its price a year ago.
