- Bitcoin fees have risen 344%
- That’s largely due to the high price of Bitcoin.
- The average Bitcoin transaction costs $ 12.
Not again! The average cost of sending a Bitcoin transaction has risen to $ 12, per BitInfoCharts, its highest price since Nov. 5, when Bitcoin was just beginning its bull run.
On Sunday, December 13, the average cost of sending a Bitcoin transaction was just $ 2.7. That marks a 344% increase in less than a week.
Rising Bitcoin fees are an unfortunate side-effect of Bitcoin’s record-breaking week, where the price of Bitcoin reached a new all-time high of $ 23,643 on Thursday, and rose 26% in the past seven days. Bitcoin’s current price is $ 23,575, up 5% in the last 24 hours.
Bitcoin fees rise whenever there is a surge of activity on the blockchain. There is a limited supply of miners willing to process transactions, and they charge fees whenever the demand for transaction processing exceeds the supply.
That means that only those who desperately need to negotiate Bitcoin will pay the high prices required to send the currency between wallets.
Joe DiPasquale, CEO of BitBull Capital, said Decrypt, “Bitcoin transaction fees are based on the availability (supply) of miners and the volume of movement of the crypto (demand) asset. With the rapid increase in consumption and transfers, and miner’s capacity growing more slowly, Bitcoin’s transfer price has risen . “
The simple explanation for high Bitcoin fees, then, is the price of Bitcoin. Many people want to trade Bitcoin, whether they buy with expectations that it will reach even higher prices, or exchange currencies because of fears that Bitcoin will soon disappear, just as it did follow his bull run in 2017.
The last time Bitcoin fees on average rose to the levels observed today was in early November, when the price of Bitcoin had begun its ascent, climbing about $ 2,000 in just a few weeks.
December 2017 holds the record for highest Bitcoin fees. During the peak of the Bitcoin bull run, average fees hit $ 50 high. And all for a modest $ 19,500!
One explanation for why Bitcoin fees haven’t risen to such unreasonable levels (yet!) This bull run is that there are far more Bitcoin miners available to process transactions today than there were three years ago.
The views and opinions expressed by the author are for informational purposes only and do not constitute financial, investment or other advice.