Bitcoin

Bitcoin fees remain low despite the price hike, but it’s only a matter of time, according to Vitalik

Despite Bitcoin’s surge to retest its 2017 highs, A combination of low chain transactions and less retail speculation has kept transaction fees down.

The current fees of around USD 3.50 per transaction are in stark contrast to three years ago. when the fees for sending an amount of BTC temporarily surged above $ 50. But the averages of the transactions are currently approaching $ 200,000This suggests the current rally was not accompanied by the same retail frenzy that drove prices to $ 20,000 in 2017.

The co-founder of Ethereum (ETH), Vitalik Buterin, doesn’t think the current low bitcoin fees will last. In a Twitter thread, Ethereum is co-founder He suggested What An inevitable increase in transaction fees will drive most users away::

“Why are Bitcoin’s unique properties important, given that a broad adoption scenario results in the majority of these users receiving basic chain fees and proving difficult to extend these properties to L2s to circumvent these limitations?”

Bitcoin fees remain low despite the price hike, but it’s only a matter of time, according to Vitalik
Bitcoin fees remain low despite the price hike, but it’s only a matter of time, according to Vitalik

But still, The data does not suggest that high fees are likely in today’s environment. To understand what is going on in the background It is important to consider the number of transactions processed, the value of those transactions, and the amount of BTC that will be held over the long term.

Bitcoin’s storage pool, similar to a waiting room for transactions, shows the current number of unconfirmed daily transactions at 38,900, which is about 20% of the 2017 figures.

Number of mempool transactions. Source: Blockchain.com

It is worth noting that The number of transactions is not only significantly lower than in the previous bull market, But this time, In response to the price increase, there was no increase. In fact, the weekly moving average has been showing a general decline since early 2019.

Confirmed transactions per day. Source: Blockchain.com

In October, The average Bitcoin transaction surpassed the 2017 high of $ 150,000. Ten days ago the average was over $ 190,000, suggesting that while the number of transactions has decreased, Those who are still doing business are more wealthy individuals or organizations.

Bitcoin users are also holding onto their coins instead of trading them this time. The amount of Bitcoin held on exchanges has been falling rapidly. Data from the Glassnode Studio analytics platform show that the previous change as of November 21st has decreased by 18%.

The chain analysis found that the amount of Bitcoin available to buyers could only be 3.4 millionand that the remainder of the offering would be in the hands of long-term investors.

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