gas fees has hiked 2X on Bitcoin and Ethereum networks: A scam or Reality?
Table of Contents
Do the new Cryptocurrency and meme tokens contribute to the rise in gas fees on Ethereum and Bitcoin?
BTC Transaction fees have skyrocketed in the past few days. Bitcoin ordinals and BRC-20 standards are expected to cause a hike in transaction fees according to some crypto experts. The avg fee per transaction has surged to $19.21 at one point and peaked at $29 yesterday.
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What is Gas/Transaction fee in Crypto Market?
Gas is a fee that is required to conduct a transaction on a blockchain like Bitcoin or Ethereum. The price of the gas is determined by the supply, demand, and network capability during the time of transaction.
In Ethereum, they are paid in gwei to the validators who verify and process transactions on the network. In the case of Bitcoin, transaction fees are paid to the miners as a reward.
Gas Fee Analysis
According to bitinfocharts, the Bitcoin average transaction fee on May 1 was $2.889. From then, the transaction fee started to spike day by day. The transaction fee had jumped to an all-time high of $31.145 on May 8. As of May 9, it has dropped to $20.311 (0.00074 BTC). And the avg block time of BTC as of May 9 is 9.536 minutes.
The surge in transaction fees is good news for miners who are going to benefit from it. And for investors, it is a nightmare.
In the case of Ethereum, the average transaction fee climbed to an all-time high of $37.683 on May 6. And on May 9, the fee price had dropped to $18.285, a relief to investors to some extent.
The avg block time of Ethereum is 0.202 minutes as of May 9. However, the hike in fees will have a significant impact on the crypto market.
Bitcoin Transaction per day
On May 1, Bitinfocharts data recorded an all-time high surge of 682.099k transactions per day. The number of transactions started to slow down gradually. As on May 9, the total number of transactions recorded is 598.105k.
The largest cryptocurrency exchange, Binance Pauses withdrawals for the second time in 12 Hours due to the spike in transaction fees. Due to the high transaction fees, there are almost 500k pending transactions on the BTC network. Ordinals have led to a spike in transaction fees and congestion.
Furthermore, ERC-20 standard doesn’t use smart contracts like Ethereum, instead, they execute with wallets supporting the bitcoin blockchain.
Bitcoin under siege from BRC-20 "junk" coins: record fees and thousands of unconfirmed transactions!
— CryptoQuant.com (@cryptoquant_com) May 9, 2023
"Unlike conventional token standards, such as Ethereum's ERC-20, BRC-20 does not utilize smart contracts and operates only with wallets supporting the #Bitcoin blockchain."
by… pic.twitter.com/yCsrXGM38H
According to Glassnode, a total of 75.77% of Bitcoin on-chain transactions used Taproot on May 7, a record high, compared to only 1.536% at the beginning of the year. Block sizes are growing as a result of the increased use of Taproot, which raises transaction fees.
The meme coins hype has caused the surge of Gas fees on Ethereum also. It seems like the gas fee is on a bullish ride taking over the cryptocurrencies.
BRC20 tokens and Bitcoin Ordinals are gaining traction as investors seek alternatives to traditional cryptocurrencies. As the number of transactions involving these tokens grows, the Bitcoin network faces similar congestion issues as Ethereum, leading to higher fees. pic.twitter.com/DqU8HNSlbX
— 𝕋𝕖𝕞𝕞𝕪🦇🔊 (@Only1temmy) May 9, 2023
Meanwhile, Binance announced that Bitcoin Ordinals are coming to the Binance NFT marketplace.
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Bitcoin price as of Today
Bitcoin has been on a bearish trend since last week. BTC price has dropped to 2.87% since last week. On May 6, the price was $29,647 with a trading volume of $18.34B, and the value started to dip slowly then after. On May 9, it reached the price of $27,333 with a trading volume of $18.89B.
Crypto experts expect the downward trend to continue. The current price of BTC at the time of writing is $27,593.09 with a market cap of $534,748,609,545. Bitcoin has a circulating supply of 19,368,950 BTC.
Bitcoin price Prediction 2023-2024
Before conducting any cryptocurrency transactions, check the transaction fees and then proceed.
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