Bitcoin (BTC) transaction fees in freefall as bull run comes to an end
From time to time we can observe a bull run — period of a cryptocurrency value increase. This comes as a blessing for investors who own coins since it is a perfect chance for them to make a fortune by reselling the assets. Today the end of the Bitcoin bull run seems dangerously close.
Fluctuating fees since the beginning of 2021
On 10th July 2021, BTC transaction fees reached an extremely low level at $3.92 (~£2.83). On 21st April 2021, they hit a record figure of $62.78 (~£45.25). Transaction fees haven’t been this cheap since December 2020. On the other hand, the record levels of commission fees seen in April haven’t been observed since December 2018. In general, this year appears to be truly “chaotic” for Bitcoin.
Various explanations about the reasons behind this sharp fluctuation are popping up. Let’s take a closer look.
Who to blame for fee fluctuation?
As a quick reminder, Bitcoin reached a peak price of $64,000 on 14th April, 2021. Back then its transaction fee was $29 (~£20.9).
An explicit correlation can be observed between high investor activity and high transaction fees. When investors move a lot of BTC at the same time, the fees go up, and vice versa. This happened, for instance, at the end of April, when the value of BTC plummeted and transaction fees increased.
At the moment, the fees are low and Bitcoin is relatively stable, in contrast to how chaotic things were back in April.
How is Bitcoin handling now?
China’s crackdown since May has had a significant impact on the crypto sector and Bitcoin in particular. Lots of mining farms have been forced to close. The government is thus trying to regain control over virtual payments, especially by introducing the digital yuan.
Bitcoin hashrate hasn’t been this low since May 2020. There are indications, however, that change for the better is on the way since many mining farms are being relocated.
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Curieuse, passionnée par les mots et par les nouvelles technologies, je mets un point d’honneur à surveiller de près toutes les actualités pour vous les partager. Au début, comme vous, je n’y connaissais rien, maintenant, je vous partage de façon claire les dernières technologies sorties et les petites infos qui peuvent vous permettre de mieux comprendre les crypto-monnaies. Multitâche, je peux même vous éclairer sur les qualités des blockchains, vous n’avez pas fini de me lire !
The views, thoughts, and opinions expressed in this article belong solely to the author, and should not be taken as investment advice. Do your own research before taking any investment decisions.