The global Bitcoin 

BTC

$16,930

 payments market will reach $3.7 billion by 2031, registering a compound annual growth rate (CAGR) of 16.3% from 2022 to 2031, with private keys and hardware driving the sector expansion, Allied Market Research forecasted in a report published on Oct. 24. 

According to the document, operational demand for efficiency and transparency in payments systems, along with data security services growth and a surge in demand for remittances in emerging economies, are among the major factors supporting growth in the sector in the coming years. The report also stated:

“Furthermore, increase in demand for bitcoin among banks, and financial institutions and untapped potential in emerging economies are expected to provide lucrative opportunities for the bitcoin payments market expansion during the forecast period." 

In 2021, the private keys segment accounted for three-fourths of the overall Bitcoin payments market share, according to the report, and the segment is expected to maintain its dominant position throughout the forecast period, with nearly 20.3% of CAGR until 2031, followed by the hardware sector that is set to grow 19.8% during the same period. 

Related: Tap-to-pay Bitcoin Lightning Bolt cards strike El Salvador

E-commerce transactions are likely to keep their relevance in the sector, growing nearly 20.2% by 2031, per the report. The Asia-Pacific region is predicted to continue its market dominance by 2031, although the fastest growth is expected to come from North America, with a CAGR of 18.6% during the period.

Referring to the barriers and challenges in the space, the report acknowledges that high deployment costs and low global awareness about the use of Bitcoin can hamper the sector's progress. It noted:

“Distributed ledger technology has spread from cryptocurrency to a wide number of applications in the financial and government industry. However, numerous people and financial & government industries across developing nations such as India, Africa, and Australia are less aware regarding transactions made using bitcoin payment, which hampers growth of the bitcoin payment market across the globe." 

As reported by Cointelegraph, the cryptocurrency bear market has impacted how people pay with crypto, but Bitcoin remains a major payment tool despite huge volatility, making up more than 50% of all sales on payment service provider BitPay's platform. The data revealed that the sales volume of BTC payments on BitPay peaked at 87% in 2021 before declining during the bear market of 2022.