Litecoin Overtakes Ethereum: Now #2 in Crypto Payments with 14.5% Market Dominance

Silver to Bitcoin's gold just pulled a power move—Litecoin leapfrogged Ethereum to become the second-most used cryptocurrency for payments worldwide. Proof that sometimes old dogs learn new tricks (while ETH holders wait for their 'ultrasound money' to materialize).

Breaking down the numbers:

The OG altcoin now commands 14.5% of all crypto payments—a stat that'll make Visa executives nervously check their rearview mirrors. Meanwhile, Ethereum's stuck explaining why its 'world computer' can't compete with a coin that just does one thing really well: move value fast and cheap.

Why this matters:

While DeFi degens chase yield farms, real-world adoption quietly marches on. Merchants care about three things: speed, fees, and reliability—areas where LTC's decade-long head start gives it an edge over flashier competitors.

The cynical take:

Nothing boosts a payment coin's metrics like a bear market—when nobody's speculating, suddenly actual utility looks pretty attractive. Just don't tell the ETH maximalists their gas-guzzling NFT platform got outflanked by digital silver.

What to Know:

• Litecoin captured 14.5% of crypto payments in July, surpassing USDC (14%) and USDT (12.2%) to claim second place behind Bitcoin's 22.9% share
• Despite ranking 19th by market capitalization, Litecoin's fast and cheap transaction capabilities make it popular for payment processing
• Merchant adoption of cryptocurrency settlements jumped from 27% in 2024 to 40.9% in the first half of 2025, indicating growing business comfort with digital assets

Payment Processor Data Reveals Market Shift

CoinGate, which provides digital asset payment processing services to merchants across various cryptocurrencies including Bitcoin, Ethereum, and Litecoin, released July usage statistics showing significant changes in customer preferences. The company's data reflects actual transaction volumes rather than market speculation.

The payment processor's July rankings showed USDC taking third place at 14%, edging out Tether (USDT) which held 12.2% of transactions. Tron rounded out the top five with 12.9% of all payments processed through the network.

Litecoin's Technical Advantages Drive Adoption

Litecoin's rise to second place reflects its practical utility for payment processing rather than investment speculation. The cryptocurrency's blockchain architecture enables faster transaction speeds and lower fees compared to Bitcoin, making it attractive for merchants and consumers conducting everyday transactions.

This practical advantage has consistently positioned Litecoin among the most-used cryptocurrencies for actual payments, despite its lower market capitalization ranking. The network's efficiency in settlement processing addresses key concerns for payment processors and their merchant clients.

CoinGate's first-half 2025 data showed similar trends, with Litecoin holding 13.6% of transaction volume, narrowly ahead of Ethereum's 13.5%. Bitcoin and Tron led that period with 23.3% and 21.6% respectively, indicating Litecoin's sustained popularity for payment applications.

Growing Merchant Cryptocurrency Adoption

The payment processor's data revealed a significant shift in merchant behavior regarding cryptocurrency settlements. In 2024, only 27% of merchants chose to retain received payments in digital assets rather than converting to traditional currency.

This figure increased substantially to 40.9% in the first half of 2025. The change suggests businesses are becoming more comfortable holding cryptocurrency directly rather than immediately converting to fiat currency.

For merchant payouts, USDC emerged as the preferred choice, likely due to its price stability and regulatory compliance advantages. bitcoin ranked second in payout preferences, though Litecoin did not appear among the top choices for merchant settlements despite its strong showing in customer payment preferences.

Understanding Cryptocurrency Payment Terms

Stablecoins like USDC and USDT are cryptocurrencies designed to maintain stable value by pegging to traditional assets like the U.S. dollar. Payment processors facilitate cryptocurrency transactions between customers and merchants, often offering conversion services to traditional currency.

Market capitalization represents the total value of all existing coins, calculated by multiplying current price by circulating supply. Transaction fees and processing speeds vary significantly between different cryptocurrency networks, influencing their practical utility for payments.

Settlement refers to the final completion of a transaction, while merchant payouts describe how businesses receive funds from cryptocurrency payments. Some merchants prefer immediate conversion to traditional currency, while others choose to hold digital assets directly.

Current Market Performance

Following the release of CoinGate's data, Litecoin's price increased more than 9% over 24 hours, recovering to approximately $119. The price movement coincided with broader market interest in cryptocurrencies showing practical utility beyond speculative trading.

Closing Thoughts

CoinGate's July data demonstrates Litecoin's growing prominence in practical cryptocurrency applications, with its 14.5% payment share reflecting real-world usage patterns. The concurrent increase in merchant cryptocurrency adoption to 40.9% indicates broader acceptance of digital assets for business transactions beyond speculative investment.