Transaction fees for Bitcoin and Ethereum have dropped to their lowest level in six months as markets have calmed down after the cryptocurrency’s recent plunge.
According to BitInfoCharts, the average bitcoin transaction price fell from $ 62.77 in early April to $ 7.20, down 88% in just six weeks.
Average Bitcoin transaction fees. Source: BitInfoCharts
According to CoinGecko, the decline in bitcoin transaction fees appears to have been driven by lower aggregate market activity, with daily volumes evaporating from over $ 67 billion on May 10 to $ 30 billion at the time of this writing.
The explosive growth of cryptocurrencies since 2021 has led to the fact that in recent months, the average transaction fees associated with the use of the Bitcoin or Ethereum network have often reached unprecedented levels.
In February 2021, Bitcoin fees nearly tripled in two weeks following the February 8 announcement that Tesla had added $ 1.5 billion in Bitcoin to its balance sheet.
The news sparked an increase in cryptocurrency speculation as the price surpassed the previous high of $ 40K before reaching $ 54,410. CoinGecko data shows that the 24-hour Bitcoin (BTC) volume nearly doubled from $ 57 billion on February 7 – the day before Tesla’s announcement – to $ 101 billion on February 23.
The average Bitcoin fee rose again to a record high of $ 62.77 on April 21, after the BTC price surged to a local high of $ 64,804 on April 14. Bitcoin fees peaked on April 21 due to increased market activity as markets began to show weakness. as traders ran with each other to take advantage of the spikes.
Bitcoin price chart. Source: CoinGecko
YCharts data also shows that the average Ethereum fee fell from a May 20 all-time high of $ 72.21 to just $ 4.80 – a 93% drop in less than two weeks.
Average Ethereum Transaction Fee. Source: YCharts
The increase in the use of decentralized funds backed by Ethereum and non-fungible tokens has driven the average tax increase from $ 3.50 at the start of the year to new highs of nearly $ 40 by the end of February.
As developers tried to tame tax markets with the April hard fork in Berlin, the speculative frenzy surrounding the Shiba Inu (SHIB) and other doggy ERC-20 tokens has pushed the Ethereum network even more congested, bringing taxes back to a record high last month. … …
Ethereum’s transaction fees last hit a new high of $ 71.21 on May 19, when Cointelegraph reported that an influx of traders looking to close off-chain leveraged positions amid falling cryptocurrency prices was driving the rise.
Complex smart contract transactions were charged 10 times the average fee in the midst of market turmoil, with CoinShares Chief Strategy Officer Meltem Demirors claiming to have paid over $ 1,000 per transaction.