Bitcoin Transaction Fees Register Unusually Low Values
Bitcoin Transaction Fees – The data shows that Bitcoin transaction fees have been abnormally low since July of last year and show no signs of recovery for the seventh month.
Bitcoin transaction fees remain low for the seventh month in a row
According to the latest weekly report from Arcane Research, BTC transaction fees are still showing no signs of rising since falling from their all-time high in April 2021.
“Transaction Fee” is the reward miners receive for hash transactions. The user sending Bitcoin attaches this fee with the transfer, and it is up to them to decide its amount.
When senders want their transaction to complete faster, they can choose to provide a higher than average rate. Transaction fees, so miners have incentives to handle their transfer first.
In April of last year, the regular Bitcoin fees had reached a new ATH of $63. However, soon after, the metric began to plummet, and by July 2021, it had reached abnormally low values.
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The graph below shows how average BTC transaction fees have changed over the past year:
It seems that the value of the metric has been relatively low for a while now
As you can see from the chart above, Bitcoin’s average transaction fees have been around $2 to $3 for the seventh month in a row, historically low values for the crypto.
So what is causing these low rates? Well, there may be a couple of reasons for this trend. Some experts believe that the adoption of SegWit may be behind this.
The SegWit upgrade cuts the size of transactions, allowing room for more transactions within the same block.
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However, the report notes that the average number of transactions per day was well above 300k during April 2021, while it has hovered between 200,000 and 250,000 since August.
This is quite a substantial drop and suggests that the plummeting number of transactions may be the main factor behind the meager fees.
Retail investors have not been very interested in Bitcoin since the spring of last year. Instead choosing to invest in other cryptocurrencies such as ETH or assets such as NFT. This is the reason why the number of transactions has been reduced.
At the time of writing, the price of Bitcoin hovers around $41,900, down 5% from last week. The chart below demonstrates the trend in the coin cost for the past five days.
The price of BTC seems to have risen during the last day | Source: BTCUSD on TradingView Featured Image from Unsplash.com, Charts from TradingView.com, Arcane Research.
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