Record Year for Crypto Payments Growth: 2023 Report

2023 has been a landmark year for CoinGate and the crypto payments industry at large. 

Our team has been working diligently, which is why today we celebrate another year of growth in our company with ambitions to see a lot more of it in 2024.

And, while we wish to share our achievements with you, we also want to show how cryptocurrency payments are flourishing right before our eyes. That’s what this yearly report is going to be about.

From the impressive surge in crypto payment volumes to the popular cryptocurrencies that dominated the year to the biggest market winners, we’re covering it all. 

One thing is for sure – 2023 has been nothing short of extraordinary, especially for businesses that embraced cryptocurrency payments in retail and e-commerce. 

Let’s delve into the numbers that narrate the tale of crypto adoption in 2023. As we reflect on the year’s accomplishments, we invite you to compare this journey with our 2022 report, offering a broader view of the ongoing crypto adoption.

Numbers Point to Tremendous Growth in Crypto Payments Adoption

The year 2023 marked a significant milestone in cryptocurrency payments, as evidenced by compelling CoinGate statistics that paint a picture of robust growth in the sector. 

Here’s an in-depth look at the numbers that highlight some remarkable trends:

Massive Growth in Crypto Payment Volume 

Our journey to process the 4,000,000th payment is a story that spans over a decade, and we’re just a few thousand orders short of that milestone. 

However, in 2023 alone, we achieved a record-breaking feat by processing 1,294,058 payments – that’s one payment every 24 seconds! 

This number is not just significant in its magnitude as it represents a staggering 39.4% increase over the previous record of 928,517 crypto payments in a single year. 

It’s a clear indicator of the accelerating pace of crypto adoption, with nearly one-third (32.35%) of all our transactions in the last ten years occurring in 2023 alone.

The Role of Binance Pay Wallet in Crypto Adoption

The integration of the Binance Pay wallet support into our payment services in March last year played a crucial role in this growth story. 

In the relatively short time since its introduction, Binance Pay accounted for a notable 8.2% of all crypto payments in 2023. 

The steady increase in its usage is impressive – starting from 4.5% of monthly payments in March, climbing to 6.1% in April, then to 8.6% in May, 9% in June, and finally reaching 13% by December. 

This perfectly steady growth leads us to believe that we should expect even more Binance Pay wallet users shopping at CoinGate-powered merchants in 2024 and sets an optimistic tone for its continued adoption.

Lightning Network Showing Signs of Maturity

The Lightning Network, an essential component of Bitcoin payments, has shown significant signs of maturity and increased acceptance. 

In 2023, Lightning Network facilitated 7.8% of all Bitcoin payments processed by CoinGate, which translates to about every 14th BTC transaction. This is a notable increase from 4.5% in 2021 and 5.9% in 2022, reflecting a growing trust and reliance on the Lightning Network. 

Worth noting that the overall number of Lightning Network payments executed grew by 35.9% compared to the previous year. 

Our commitment to this technology is reflected in our node’s statistics: with a capacity of 29.60540370 BTC, it represents 0.599% of the total Bitcoin in the Lightning Network. 

Our node has 1,532 channels (2.542% of the total), ranking us as the #4 largest nodes by channel count and connecting us to 1,435 active nodes, which is 9.786% of the network. This data underscores our position as a key player in the Lightning Network ecosystem, and we intend to keep it that way.

What Were the Most Popular Cryptocurrencies for Payments in 2023?

The landscape of cryptocurrencies used for payments witnessed some intriguing shifts in 2023. 

Here, we delve into the detailed statistics to understand the preferences and trends that emerged over the year:

• Bitcoin, long regarded as the primary currency for crypto payments, saw a change in its dominance pattern. Although it retained its top position for the most part, its share in total payments processed through CoinGate decreased. In 2021, Bitcoin accounted for 54.8% of all transactions. This figure dipped to 47.8% in 2022 and further declined to 35.6% in 2023. This trend indicates a diversifying landscape in cryptocurrency usage for payments.
• Stablecoins, particularly USDT, emerged as an increasingly popular choice for crypto payments. This is evident from the growth in its usage: USDT transactions made up 15.1% of all payments in 2022, and this figure jumped to an average of 25.4% in 2023. This significant increase of 10.3% within a year underscores a shift towards stablecoins for their perceived stability and reliability. For example, at Ondato, a SaaS company that accepts crypto through CoinGate, USDT accounts for 94.4% of all cryptocurrency payments they receive. Learn more about Ondato’s experience with crypto payments.
• Litecoin maintained its popularity, securing the third most used currency spot with 9.5% of the total transactions, consistent with its 2022 dominance. In addition, we saw a 39.7% yearly increase in the number of payments made with Litecoin.
• Ethereum, however, experienced a slight decrease in usage, moving to the fourth position. In 2022, Ethereum transactions accounted for 11% of payments, but this reduced to 9.3% in 2023, reflecting a slight shift in user preference.
• TRON (TRX) solidified its position in the top five for the second consecutive year. Its share in crypto payments increased from 5.9% in 2022 to 7.1% in 2023, demonstrating a slight growth in its acceptance and use.

BTC Dominance in Payments Ended Late 2023

An interesting development occurred in the latter part of 2023, marking a significant shift in the landscape of cryptocurrency payments. Despite the yearly averages, USDT overtook Bitcoin as the dominant payment currency in the closing months of the year.

In November, USDT accounted for a substantial 36.5% of all transactions processed through CoinGate, surpassing Bitcoin, which stood at 28.5%. This trend further intensified in December, with USDT climbing to 39.1% and Bitcoin decreasing to 20.7%.

Several factors might have contributed to this shift. Notably, our decision to discontinue support for BUSD since late 2023 likely influenced users’ preference towards USDT. 

Additionally, the market anticipation of Bitcoin rallying in 2024, fueled by expectations of a Bitcoin spot ETF approval, may have led users to hold onto their BTC instead of using it for shopping.

Crypto-Friendly Merchants Were the Biggest Winners in 2023

In 2023, merchants who have boldly embraced cryptocurrency payments experienced remarkable success, despite the broader e-commerce and retail sectors showing relatively slow adoption. 

From the perspective of CoinGate, the number of businesses accepting crypto payments remained consistent, but the impact on those who did was significant.

Merchants steadfast in accepting cryptocurrencies over the years witnessed exceptional gains. An impressive one-third of all cryptocurrency payments processed in our ten-year history occurred in 2023, and these merchants were the ones to absorb all that purchasing power.

Among these, Eldorado.gg reported crypto payments as contributing to 3% of their total sales. Meanwhile IPRoyal, a proxy service provider, saw over 30% of their payments made in cryptocurrencies. 

However, the standout success story comes from Hostinger, a web hosting provider, which captivated nearly one-fourth of all crypto-paying customers. This remarkable market capture not only reflects the growing popularity of cryptocurrencies but also underscores the effectiveness of these platforms in offering valuable solutions to their customers.

According to Hostinger’s Head of Payments, Mindaugas Barzdenis, their company has also long heard requests from customers to allow alternative payment methods, especially from places where bank accounts or payment cards are not easily accessible, but cryptocurrencies are becoming increasingly prevalent.  

“Since we are a global company and provide our services in the most diverse countries, we have faced challenges in specific markets. Although a bank account or a payment card seems to be a common and easily accessible payment instrument in Lithuania, it is far from the case in developing countries, so the ability to offer the end user as many different payment methods as possible has a very positive effect on sales. It’s also a good customer experience when purchasing services on the Hostinger website,” – said the Head of Payments.

Benefits of cryptocurrency payments are not related to sales numbers only. Surfshark, a VPN service, utilized cryptocurrencies to cater to the unbanked population. Cherry Servers, a bare metal cloud service provider, expanded their service scope significantly through cryptocurrency payments.

The experience of these merchants in 2023 clearly demonstrates the potential and transformative power of cryptocurrency payments. 

If you’re interested in what crypto-friendly merchants have to say about taking payments in crypto, check out these testimonials from our clients. 

And, if you’re thinking about accepting cryptocurrency payments yourself, be sure to get familiar with the opportunity.

What Has the CoinGate Team Accomplished in 2023?

As mentioned in the beginning of this report, many minds are working every day to make cryptocurrency payments convenient and accessible to as many businesses as possible, and that’s why we keep improving on our product every year.

This year, these were the major milestones for us:

1. Introduction of Binance Smart Chain (BSC) & Polygon Payments 

This year, we expanded our cryptocurrency offerings by introducing Binance Smart Chain (BSC) and Polygon payments. This move not only diversified our payment options but also catered to the growing demand for alternative blockchain networks, known for their efficiency and lower transaction costs.

2. BEP20 Token Implementation

We began integrating BEP20 tokens into the CoinGate payment system on demand. This integration is a significant step towards embracing a broader range of cryptocurrencies, enabling our users to transact with more diverse digital assets and providing merchants with more flexibility in payment options.

3. Addition of Binance Pay to CoinGate Invoice 

Integrating Binance Pay as a payment option on our platform was a strategic move to tap into the vast user base of Binance. This addition has made it easier for Binance users to make seamless crypto payments at CoinGate-powered merchants, enhancing user experience and expanding our reach.

4. Launch of Arbitrum Network Support

Supporting the Arbitrum network was a major technological advancement for us. Arbitrum, known for its layer-2 scaling solutions for Ethereum, offers faster and cheaper transactions. By integrating this network, we’ve provided our users with a more efficient and cost-effective way to process Ethereum transactions.

5. New Website Design Launch 

We unveiled a new website design, aiming to enhance user experience with a more intuitive interface, improved navigation, and a modern aesthetic. This redesign reflects our commitment to staying current and user-friendly, aligning with the evolving needs and preferences of our customers.

6. Major Improvements in Merchant Account Functionality

We made significant improvements to our merchant account functionalities, focusing on simplifying the user experience, enhancing security features, and providing more in-depth analytics. These enhancements allow merchants to manage their transactions more efficiently and gain better insights into their sales trends.

What’s Next on CoinGate’s Roadmap?

As we look back on a year of significant achievements, our gaze is firmly set on the future. We are committed to continually evolve and introduce new features that enhance the experience for both merchants and users. 

Here’s a glimpse into what we have in store:

Mass Payout Feature

A major development we’re eagerly anticipating is the launch of our mass payout feature. This innovative feature is poised to revolutionize the payout process by enabling businesses to efficiently disburse payments to multiple recipients in various cryptocurrencies. 

Pay from CoinGate Balance

We’re also excited to tease the ‘Pay from Balance’ functionality for CoinGate users. This feature will allow users to utilize the funds in their CoinGate account balance to seamlessly pay invoices at any merchant store equipped with our payment option. This addition aims to provide a more fluid and hassle-free transaction experience, further integrating our services into the daily operations of businesses and consumers alike.

Sub-addresses for Businesses

In our pursuit to empower merchants even more, we will introduce the capability for them to share deposit addresses with their clients that could be used to collect instant deposits easily, for example, while streaming, collecting donations, etc. This feature, known as ‘Sub-addresses’, will offer merchants greater flexibility and control over their transactions. 

Looking Ahead

As we wrap up our 2023 report, it’s clear that this year has been nothing short of revolutionary for the world of cryptocurrency payments, and we’re happy to witness this change and be active participants.

Our journey through 2023 has been marked by significant milestones, from expanding our payment options to enhancing user experiences. These achievements reflect our commitment to making cryptocurrency payments more accessible, efficient, and mainstream.

But our work doesn’t stop here. The horizon of 2024 is already promising new opportunities and challenges. We’re excited to continue our journey, focusing on innovation and customer satisfaction, as we strive to make cryptocurrency payments a norm rather than an exception.

Thank you for being a part of our 2023 journey. Here’s to a future where crypto payments are as common and effortless as any other form of transaction. Let’s step into 2024 with anticipation and readiness to embrace the endless possibilities that lie ahead.

Together, let’s make every year a landmark year in the evolution of digital payments, like always!

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