A report revealed by Arcane Analysis has revealed that just about half of Paxful’s commerce quantity comes from commerce between Bitcoin (BTC) and reward playing cards.

The report discovered that, “buying Bitcoin with reward playing cards has been the popular answer on Paxful every month all through the five-year span analyzed,” and in June accounted for 48% of Paxful’s quantity.

Paxful processes almost $40 million in weekly commerce, which implies as much as $20M of BTC is exchanged for reward playing cards each week. Arcane highlighted the final week of June this 12 months within the report, by which $16.2M BTC was offered for reward playing cards.

Arcane attributes most of Paxful’s quantity to demand for remittances from jurisdictions with poorly developed monetary companies. With greater than half of Paxful’s commerce by worth going down in america, the studies counsel a lot of the platform’s North American quantity represents migrant employees sending funds to their households.

“The reward card cost answer is versatile. It permits patrons to not directly buy BTC with money by means of purchases of well-liked reward playing cards at gasoline stations, after which resell these reward playing cards on Paxful for BTC.“

Arcane notes that many of those trades are settled at a big low cost from market worth, suggesting a few of these trades could relate to unlawful actions:

“[Gift card trading] is commonly carried out at a big low cost, right down to 60 cents on the greenback. A pure query to ask is subsequently, who’s prepared to take a 40% hit to purchase Bitcoin this fashion?”

Paxful emerged as the highest peer-to-peer (P2P) Bitcoin market after Localbitcoins launched KYC necessities one 12 months in the past for customers with greater than $1,000 in annual commerce quantity.

Whereas western buying and selling has shifted away from the P2P markets in favor of centralized exchanges since 2016, Arcane notes the quantity from rising “frontier” economies has persistently elevated over current years.

Regional dominance over P2P Bitcoin quantity: Arcane Research

Western Europe’s share of worldwide P2P quantity has slumped from 20% on the peak of the 2017 bull run to 10% at the moment, whereas North American commerce has fallen from 53% of the globe’s in 2016 to 35% at the moment.

For the reason that begin of 2016, P2P quantity from Sub-Saharan Africa and Latin America has grown from 4% and 1% to 19% and 13% respectively.