eCommerce: Payment Methods

Cryptocurrencies in the United States: Revenue Development, Top Currencies, Acceptance in eCommerce

The cryptocurrencies market in the U.S. is projected to hit US$33 billion by 2028. Today, a growing share of eCommerce vendors are also accepting payments in crypto. But will cryptocurrency dominate the eCommerce payment landscape anytime soon? Find out in this article.

Article by Nashra Fatima | April 08, 2024


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Cryptocurrencies in U.S. eCommerce: Key Insights

  • Revenue Growth: In the U.S., revenues generated from cryptocurrency use are estimated at US$18 billion in 2023. With a projected annual growth rate (CAGR 2024-2028) of 9.1%, the market size will reach US$33 billion by 2028.

  • Top-owned Cryptocurrencies: The top-owned digital currency in the U.S. is Bitcoin, with 83% of users owning it in 2023. Ethereum is second and Litecoin third, owned by 49% and 25% users respectively.

  • Acceptance by eCommerce Vendors: 37% of all eCommerce vendors in the U.S. accept cryptocurrency as a payment method in 2024 – an increase of 10% from 2022.

Cryptocurrency is no longer a novelty. This decentralized digital currency, which lies outside of direct government control, is being adopted in various industries — from banking to healthcare to eCommerce.

Where does the cryptocurrency market in the United States stand in terms of revenue? What are the top-owned cryptocurrencies? And what is the outlook for cryptocurrency payments in eCommerce?

Cryptocurrencies in the United States: Revenue Development from 2019 to 2028

The United States is globally the biggest market for cryptocurrencies by revenue. In 2024, its value is estimated to be nearly ten times that of the UK - crypto’s second largest market.

Revenue from cryptocurrency refers to the income generated from the usage of cryptocurrencies in activities including payment for goods and services, investment, and trading in cryptocurrency (buying or selling it) on an online exchange market, among others.

In 2023, revenues from cryptocurrency are projected to reach US$18 billion in the U.S. This yearly growth of more than 100% comes after a decline seen in 2022, when the market had shrunk by 33% compared to the previous year.

Revenue in the Cryptocurrencies Market in the United States, 2019-2028

In addition to market size, in just a two-year period, the number of cryptocurrency users in the U.S. also multiplied rapidly: from 9.7 million in 2020 to 51 million in 2022. A survey also found that, in 2023, 20% of the U.S. population owned a cryptocurrency, 76% of whom agreed that cryptocurrency and blockchain technology (on which cryptocurrency is built) are the future.

However, the expanding user base does not translate to even market growth. As the data illustrates, the cryptocurrency market is highly volatile and vulnerable to external events.

For instance, revenues skyrocketed between 2019 and 2021, with annual growth of more than 300%. The demand peaked during the pandemic, when cryptocurrencies became attractive as a hedge against inflation, trade restrictions, and political instability.

But then, a decline occurred in 2022 when the Federal Reserve increased interest rates in response to high inflation. These developments cast a doubt on crypto’s ability to maintain its value and act as a shield against inflation, as it became clear that cryptocurrencies, too, are subject to macroeconomic influence.

Such intense market swings happen because cryptocurrency is still a new digital asset. While it works as both a virtual currency and an investment, its long-term utility remains uncertain. This causes investor sentiment to fluctuate, which ends up impacting its market worth.

Going forward, the cryptocurrency market size is expected to grow at a compound annual growth rate of 9.1% and reach a total amount of US$33 billion by 2028.

Factors likely to bolster its growth include advancement in the blockchain technology, increasing interest in decentralized finance (DeFi) which seeks to remove centralized institutions and third parties from financial transactions, and the rising popularity of virtual currencies like Bitcoin.

Top Cryptocurrencies in the U.S: Bitcoin Leads, Followed by Ethereum

By a large margin, the top-owned cryptocurrency in the United States is Bitcoin: 83% of people who are cryptocurrency owners own it in 2023.

Bitcoin ownership, like the cryptocurrency market, has seen fluctuations in recent years: the 2023 ownership level surge comes after a 2022 decline.

Top 5 Most Popular Cryptocurrencies by Ownership in the United States, 2021-2023

At 49%, the second-most owned cryptocurrency is Ethereum. The adoption rate for this currency has been on an upward trend since 2021, with no dips recorded.

Other cryptocurrencies are comparatively less popular and have also seen uneven adoption rates. For instance, Dogecoin, ranked fourth, is owned by just 20% of respondents in 2023 compared to 30% in 2021.

Bitcoin, the top-owned currency, is also the oldest. It has a maximum supply of 21 million coins, is resistant to government control, and has garnered credibility. With a large user base, it remains one of the most widely accepted cryptocurrencies globally, particularly in eCommerce.

Well-known names like PayPal, Shopify, Etsy, and BigCommerce now have cryptocurrency payment integrations. In fact, the increasing adoption of cryptocurrencies not only by users but also businesses is a key factor driving its growth.

Cryptocurrency in eCommerce: 37% of U.S. Companies Accept Cryptocurrency as a Payment Type in 2024

eCommerce merchants in the United States are diversifying the payment types that they accept. Alongside credit cards and eWallets, cryptocurrencies are also being offered by a small but growing number of vendors in the U.S.

In 2024, 37% of companies accept cryptocurrencies as payment for all types of eCommerce. This is a notable improvement from just two years ago, when a smaller 27% accepted payment in crypto.

Payment Types Accepted by All Ecommerce Vendors in the United States, 2022 & 2024

The share of businesses that offer credit cards has declined since 2022 but is still the largest, while acceptance for eWallets like PayPal and Apple Pay has remained stable.

On the other hand, newer methods like cryptocurrency and BNPL (buy now, pay later) have seen an increase in acceptance by eCommerce vendors at a comparable level.

How to Use Cryptocurrency in eCommerce

Online shoppers who want to use cryptocurrencies must first set up a crypto wallet, which are apps for storing virtual coins. Examples of wallets are Coinbase and Trust.

eCommerce retailers that directly accept cryptocurrency may integrate a third-party crypto payment gateway like BitPay. A button saying “Pay with Crypto” directs shoppers to checkout, where they can view the total amount in cryptocurrency and complete the transaction using the coins in their wallet.

Alternatively, shoppers can use cryptocurrency debit cards. Payment through them works exactly like bank-issued credit or debit cards – only, they are topped with a cryptocurrency rather than fiat money.

Benefits of Using Cryptocurrencies in eCommerce

In eCommerce, crypto payments allow cross-border transactions without currency conversion and remove third-party intermediaries like banks.

Compared to traditional methods, payment through cryptocurrencies is faster: they have shorter processing times, unlike credit cards or bank transfers. They also incur low to no transaction fees. This could motivate small and medium-sized vendors to accept it as a payment type.

The use of blockchain technology ensures that crypto transactions are transparent and hard to dispute, thus minimizing chargebacks. It is also secure, with online shoppers able to carry out purchases anonymously and without revealing personal information. Moreover, the risk of fraud and cyberattacks is also significantly low.

Drawbacks of Using Cryptocurrencies

Despite the benefits, the acceptance rate of cryptocurrency lags dominant payment methods, both traditional and newer ones. For instance, the acceptance rate of credit cards is 80% in 2024, compared to a much smaller 37% for cryptocurrencies. The associated risks of the crypto market as well as lack of user trust are likely contributing to lower acceptance rates.

As stated earlier, the cryptocurrency market is unstable. The price volatility can cause cash-flow problems for retailers, and they may end up insisting on established payment types. Also, the value of different cryptocurrencies can fluctuate wildly, which makes accepting one coin over another risky.

Cryptocurrencies also lack buyer protection, which means online shoppers cannot reverse a transaction or get refunds. This is not the case for methods like credit cards or eWallets. Moreover, most consumers still do not fully understand cryptocurrency and thus tend to distrust the method.

While cryptocurrency usage in U.S. eCommerce has increased in recent years and may expand further, its growth largely depends on consumer demand. Overall, its adoption in eCommerce is unlikely to be rapid enough to overtake dominant payment types like cards and eWallets in the near future.

Closing Remarks

After two consecutive years of increase, the cryptocurrencies market in the United States plummeted in 2022. Despite growth projections for 2023 and onwards, it is likely to remain uncertain. The share of businesses that accept cryptocurrencies for eCommerce payments has grown in past years but is still low compared to other payment methods.

2023 was marked by lawsuits and penalties against crypto companies in the U.S. As the country pushes for formal legislation frameworks to monitor digital currencies, the developments are also likely to impact the adoption of cryptocurrencies in the U.S. eCommerce market.

Sources: Statista, Coinbase, Columbia Law School - Blog