Bitcoin processes more dollar volume than PayPal already and the largest decentralized cryptocurrency network worldwide could outstrip Mastercard in five years' time.
Market intelligence platform Blockdata published a report on Nov. 25 titled When might the Bitcoin network process volumes like Mastercard and Visa? Bitcoin's network handled about $489 billion per quarter in 2021, which is more than Paypal's $302 billion.
Just 12 years after its creation, Bitcoin processes roughly 27% of Mastercard's $1.8 trillion per quarter and 15% of Visa's $3.2 trillion.
In terms of total volume processed, there have been three factors that may lead to the Bitcoin network overtaking the two credit card giants: the total number of transactions, the average amount of each transaction Bitcoins sent per transaction, and the price of Bitcoin.
First, the total number of transactions is a variable that is highly dependent on other factors. Bitcoin could theoretically process the equivalent of Mastercard's daily volume of transactions if the value transferred per transaction were increased by 260%.
Despite this, the report did not find statistics indicating that the average amount of Bitcoin sent per transaction is on the rise. Bitcoin and Mastercard would also be identical if the price rose to $245K at the current volume, but the trend could change in the future. According to some analysts, this price movement might be more likely than a volume increase.
Bitcoin's price may never reach the level required to compete with Mastercard, according to Blockdata. It could take until 2060 if one considers the average yearly Bitcoin price. However, based on the current growth rate in 2021, it could happen as early as 2026.
In the report, the report mentioned that despite being relatively young, the decentralized Bitcoin network has achieved higher volumes than the two largest centralized credit card companies.
Bitcoin represents 27% of all transactions compared to Mastercard, an organization founded in 1966, despite only being 12 years old.