Paxful has emerged as a winner over the incumbent LocalBitcoins P2P bitcoin marketplace, with its volumes showing a steady increase in recent times.
Paxful and LocalBitcoins are both leading peer-to-peer Bitcoin marketplaces where users can buy, sell, and trade bitcoins. For years, the New York-based Paxful and the Helsinki-based LocalBitcoins have been locked in a healthy battle. As the crypto market continues to see more adoption, interest, and volumes, which one of them has the edge?
Paxful, in addition to being a P2P service, also offers a free Bitcoin wallet, kiosk service, vendor service, and an affiliate program. Paxful also provides some 300 payment options including Amazon gift cards. On the other hand, LocalBitcoins has remained dedicated to peer-to-peer transactions and provides around 30 payment options. LocalBitcoins has had a geographical edge – being available in all countries of the world, while Paxful is unavailable in certain countries. But there’s more to the story.
Paxful Emerges Victorious along with whole of Peer-To-Peer Market
In June 2020, Paxful surpassed LocalBitcoins as the largest peer-to-peer Bitcoin marketplace, garnering a 52 percent share in the market. Not just that, overall the volumes on P2P exchanges increased significantly.
A week to remember in the #bitcoin P2P market. @Paxful just surpassed @LocalBitcoins in trading volume for the first time in history. (Data: @Coin_Dance)https://t.co/AYqvuAPAdh pic.twitter.com/tAcBfg1ieM— Arcane Research (@ArcaneResearch) June 17, 2020
Tracing the weekly growth of both Paxful and LocalBitcoins helps to give some insight about their journey and also the possible reasons for Paxful’s success.
Global Volumes on Paxful
Global Volumes on LocalBitcoins
Observation of both global and Indian scenarios makes one thing obvious – that perhaps the real reason behind Paxful’s success is its steady, consistent growth.
Paxful Volume in India
LocalBitcoins Volume in India
The Indian scenario holds many similarities with the current global sentiment around these platforms. Paxful has observed significant market growth with its Indian users as well. The first week of April 2020 has seen a 408 percent year-on-year increase since last April.
Paxful’s Audience Connect
Another strategy that is worth noting is how Paxful has capitalised on its market success. In 2019, Paxful saw a significant market success. Africa was central to this success story, with 46 percent of its hosted wallets being from Africa. As a result, Paxful decided to deepen its relationship with users from its African market and build upon this success.
A unique aspect of Paxful’s journey is that it has placed financial inclusion as its focus. With education and social development as a priority, Paxful undertook an education drive focused on universities, launched a Paxful Peer Program, and has also planned the 100-school initiative.
On the contrary, LocalBitcoins has had large peak volumes towards the end of 2017 and the beginning of 2018. But its curve is unsteady and there seems to have been an overall decline in volumes. We cannot also discount the fact that LocalBitcoins is the best example of a product that runs on a lean team and is also highly profitable. LBC on the other hand does no additional marketing and has not made any significant updates on their platforms, whereby Paxful is focused on UX and increasing use cases for consumers.
But the real question is, how is Paxful growing compared to Spot Markets in India.
How are other BTC/INR marketplaces faring?
There are no clear sources to determine the historic volumes of WazirX, Bitbns and other exchanges. At press time, BTC-INR markets on Bitbns and WazirX are pulling <20 and <50 BTC volumes which totals to ~600k USD. However these exchanges see more volume on USDT-INR markets than the BTC-INR markets.
At the same time, Paxful pulls ~300k USD volume just on the BTC/INR market everyday.
While new P2P bitcoin marketplaces based in India are also emerging (Bisq is another P2P marketplace seeing promising global growth but still finding its footing in India), it is Paxful’s understanding of the core needs of Indian users, such as offering payment options through UPI transfer, IMPS transfer, Paytm wallet, PhonePe BHIM and bank transfer that has played a major role in its success. It is also worth mentioning that Paxful has been successfully running campaigns in India with portals such as Coin Crunch.
Simultaneously, in line with its global trend, LocalBitcoins has seen a fall in Bitcoin volumes in India too in recent times. But it’s not just the incumbent LocalBitcoins that Paxful has managed to defeat, but also other peer-to-peer marketplaces. Paxful seems to be emerging as the largest P2P marketplace for bitcoins in India and is markedly ahead of its competitors.
In a recent interview, Paxful co-founders Ray Youssef and Artur Schaback said that they were processing nearly 8,000 bitcoin transactions every day. The team is set to ramp up the platform with superior updates and from the looks of it, things might just keep getting better for this P2P marketplace.
Paxful is leaving no stone unturned to increase its foothold in large markets like India and their development model in Africa and India has thrived. With a mobile app, a good web interface and several payment methods, Paxful is opening avenues for Peer to Peer trading enthusiasts and the data says, it is working!