Last edited: Nov 30, 2021

Bitcoin has officially surpassed Paypal in transaction volume, recording an average of $480 billion per quarter in 2021. Meanwhile, Paypal, one of the largest digital payments networks across the globe, averaged $302 billion per quarter this year.

It is quite impressive for a 12-year decentralized payments platform to reach a volume above a well-established platform like Paypal, and it is even closing in on credit card companies such as Visa and Mastercard. Previously, skeptics of cryptocurrencies, especially on Bitcoin, claimed that Bitcoin will never be able to reach the same heights as credit card companies, simply because the transaction speed and costs are too high relative to credit cards. However, it seems like this claim will be debunked, especially with more people adopting Bitcoin as a payments and store of value method.

With regards to the transaction volumes of credit card networks such as Mastercard and Visa, Mastercard has recorded $1.8 trillion per quarter in 2021, while Visa recorded $3.2 trillion per quarter. To put things into perspective, it would require Bitcoin’s price to balloon to over $260,000 to match Mastercard’s transaction volume today, or for the average transaction involving bitcoin  to increase by 260%, which is unlikely to happen.

According to a report, estimated by Blockdata, the year frame between which Bitcoin could be on par with Mastercard in terms of dollars in transaction volume per year would be between 2026 – 2060.

However, the report also acknowledges that if Bitcoin manages to scale beyond its layer 1 solution, the blockchain, and adopt layer 2 solutions such as the Lightning Network, realistically the transaction volume could massively increase, since it is possible to process, send, or receive thousands to millions of transactions while only needing two transactions to be recorded on the layer 1 blockchain: one to set themselves up on the layer 2 network, and one to settle the balance in the end.

With new technological innovations and scaling solutions, Bitcoin could realistically process exponentially more transactions than it is currently capable of, and with these solutions it could look to overtake credit card companies in transaction volume. If and when Bitcoin is capable of replacing credit card companies outright, it wouldn’t be shocking to anyone that its price may have tripled or even quadrupled over that time frame, given that an expanding userbase should be enticing more investors of the coin itself.

Bitcoin price chart over the last 24 hours (15 minute intervals)