Transaction fees on the Bitcoin and Ethereum networks have decreased by 81% and 71%, respectively, in the past few weeks, while the cryptocurrency market in general continues to decline from its recent all-time high.
The average cost of using the Ethereum blockchain fell from $ 69.92 per transaction on Wednesday to $ 20.06 on Sundayaccording to information from Bitinfocharts. During the same period, the spot price was Ether (ETH) peaked, falling from an all-time high of $ 4,358 on Wednesday to $ 3,183 just before the release.a decrease of 27%.
Before the 2021 market rally, Ethereum’s current average fee of $ 20 would have been an all-time high by far. In 2020, the average usage cost was less than $ 0.10. The rapid rise in the cost of using Ethereum is due to the emergence of decentralized financial applications – which now make up four of the five largest gas burners in the blockchain – and the greatest attention that the blockchain received in the wake of the market boom of 2021.
The number of daily Ethereum users has quadrupled since the beginning of 2020 from around 400,000 to 1.6 million, according to Bitinfocharts. This number does not take into account transactions that take place on Ethereum’s Layer 2 protocols.
A similar trend can be seen on the Bitcoin network, whose transaction fees have dropped 81% since mid-April, when the price of the BTC coin was close to $ 65,000. The average transaction cost of around $ 62.77 marked a new all-time high for BTC, beating the 2017 high of $ 55This was the top of Bitcoin’s Bull Run at the time.
Bitcoin was trading at $ 42,440 early Monday morning, a 34% decrease from its most recent high in April.. Bitcoin’s dominance, which measures Bitcoin’s share of global cryptocurrency market capitalization, fell to 39.9% on Monday after peaking at 70% in December.
While this generally indicates that the altcoin market is growing, this number can also be misleading due to the different size of the market capitalization for cryptocurrencies at different times.. For example, Bitcoin market dominance approached 90% in 2017, but its global market cap was only $ 2 billion, or 0.1% of today’s market cap. At the same time, global market capitalization can easily be increased by anyone who takes the trouble to launch any token with a high bid and even a modest starting price.