Bitcoin Transaction Fees Reach Multi-Year High on the Back of Memecoin Hype
According to data from Crypto Fees, Bitcoin transaction fees have surged to their highest point in the past two years in early May. The total amount of fees paid on the Bitcoin blockchain reached $3.5 million on May 3, skyrocketing by around 400% from late April. The average Bitcoin transaction fee also reached as much as $7.2 as per YCharts.
Although transaction fees have surged over these past few weeks, the current transaction cost is still far from the all-time high levels. It is interesting to note that the recent spike is primarily attributed to a surge in Bitcoin activity involving BRC-20 transactions. As per data from Galaxy Research, 50% of all Bitcoin transactions on May 2 were related to BRC-20 transactions.
BRC-20 is an experimental token standard designed to allow Bitcoin users to issue and transfer fungible tokens on the Bitcoin blockchain. It is modeled after Ethereum’s ERC-20 token standard. Introduced in March 2023 by a pseudonymous on-chain analyst known as Domo, the BRC-20 token standard has quickly become a major trend in the cryptocurrency industry, specifically amid the sharp growth of the PEPE memecoin.
The PEPE memecoin has rallied over 600% in the past seven days, reaching an all-time high of $0.00000216 on May 5. The Bitcoin blockchain, however, is not the only blockchain affected by the ongoing memecoin hype. Gas fees on the Ethereum network have also been skyrocketing to new multi-month highs recently. On May 2, ETH transaction fees hit an aggregate amount of over $19 million, a level not seen since May 2022, according to Crypto Fees. The Ethereum blockchain remains the most expensive network in terms of transaction fees.
Despite the latest spike in Bitcoin transaction fees, it is currently far from the all-time high levels. The highest Bitcoin transaction fees were recorded in April 2021, when the average BTC transaction cost almost reached $70 due to a significant decline in the Bitcoin network hash rate. The previous highest point in BTC transaction fees was in 2017, with transaction costs surging above $60.
Bitcoin has been gaining significant mainstream adoption recently, with well-known businesses such as Tesla and PayPal investing in it. However, the recent memecoin trend driving Bitcoin transaction fees to multi-year highs is worth watching closely as this could impact future Bitcoin transactions and pave the way for further developments in blockchain technologies.
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https://cointelegraph.com/news/memecoin-hype-drives-bitcoin-transaction-fees-to-multi-year-highs