The recent Spot Bitcoin ETF approval has started showing wonders (fingers crossed). A report by CoinShares shows a record increase of over USD 1 billion in the inflow of recently launched Bitcoin ETFs since its approval. Bitcoin’s value is also grabbing headlines. We saw BTC crossing $50k this year and the value has grown almost 10% in the past five days.
Apart from Bitcoin’s value, we found Bitcoin.com News showing respectable inflow amounts for Ethereum ($16 million), Cordano ($6 million), Avalanche ($0.5 million), Tron ($0.4 million), and Polygon ($0.4 million). So we can say that spot Bitcoin ETFs are doing wonders after getting approved.
[Also read: The Spot Bitcoin ETF Approval Indicates Positive Signs for Crypto Investors]
The Rise of Crypto Payments after the ETF Approval
It’s quite predictable that the utilization of cryptocurrencies may rise along with the growing adoption. But all eyes are on crypto payments. They’re arguably one of the most preferred crypto utilization methods. However, we need to discuss factors that can drive the rise of crypto payment methods.
Higher Accessibility
As we saw earlier, The record Bitcoin ETF inflow of more than $1 billion cannot be a wonder. As we predicted a boost in Bitcoin’s seamless accessibility, such inflow can be considered as a part of positive results. We can expect a 2x rise in the total number of cryptocurrency users by the year-end with such results.
This can also affect the potential ROI. Specifically, merchants accepting crypto payments can expect two times higher potential returns on investments, which is currently 327% on average (based on a study by Triple-A). Such progressive stats can inspire merchants to add more payment options for consumers.
Higher Utilization of dApps
We may witness several market players launching various decentralized apps like crypto payment gateways, decentralized exchanges, NFT marketplaces, etc. The projected compound growth rate of the crypto payment gateway market is over 16% per year (from 2024 to 2030) before the launch of the recent ETF.
As accessibility is expected to increase, we may see frequent launches of new decentralized apps, and the projected compound annual growth rate of the crypto payment gateway market may cause a slight lean over such gateways. So more such dApps will attract more individuals to join the crypto payment system and we can expect the market to grow by 20% instead of 16% from 2024 to 2030.
Integration With TradFi
This can be a major sign of crypto going mainstream. The positive impact of the ETF approval may reduce transaction fees and boost Bitcoin market liquidity. However, traditional finance organizations like Visa and Mastercard have already covered over 1 million merchants for adopting crypto for their businesses. Visa has enabled USDC settlements, while Mastercard has launched a crypto-linked debit card that supports Bitcoin and other currencies.
The growing crypto adoption may inspire several other TradFi institutes to offer crypto payment gateways and other DeFi services. This may help cryptocurrencies go mainstream and may cover over 600 million individuals, especially those who have security concerns with dedicated decentralized apps. However, TradFi institutes may not please privacy-concerned merchants as registration on such platforms usually requires submitting private information. However, the integration of crypto with TradFi may increase the popularity of crypto payments by over 35%.
Challenges
- Crypto-related regulatory frameworks are constantly being changed. Regulations that are clear and supportive can increase customer trust, proportionally increasing the adoption.
- Fixing issues like transaction capacity, security vulnerabilities, and energy consumption becomes crucial for building trust among individuals.
- User interfaces of crypto payment gateways and wallets are usually complex. Platforms with an easy user interface may encourage more users to get involved.
Conclusion
The spot Bitcoin ETF approval has unlocked more possibilities, especially for Bitcoin. The record inflow of over $1 billion indicates a new era in finance. This new era may treat cryptocurrencies as equally as fiat currencies. With a growing value and adoption of cryptocurrencies, and more institutes going mainstream in crypto, we’re just left with a few challenges to go mainstream with crypto payments and other crypto utilization methods.