It is a good time to move Bitcoin (BTC) between wallets and exchanges. Bitcoin transaction fees have hit record lows, according to a study by Galaxy Digital.
#bitcoin fees are at all-time lows. the craziest thing? fall 2021 was the first bull run not accompanied by a major spike in fees.
how is that possible? what does it mean? here’s a thread explaining the most confounding (and awesome) chart in bitcoin. (remember june 2021) pic.twitter.com/gnWssTckX2
— Alex Thorn (@intangiblecoins) April 5, 2022
Bitcoin fees are at record lows. the craziest? Autumn 2021 was the first bull run that was not accompanied by a major spike in fees.
How is that possible? What does it mean? Here is a thread explaining Bitcoin’s most confusing (and impressive) chart. (remember June 2021)
As shown in the chart below, the average Bitcoin transaction fee has plummeted to 0.00004541 Bitcoin ($2.06) in 2022, while the median is 0.00001292 Bitcoin ($0.59), which is the lowest of any year, except 2011, according to the report.
According to Alex Thorn, head of research at firm Galaxy Digital, a combination of increasing Segwit adoption, batch transactions, the growth of the Lightning Network, a collapse in miner sales, and “reduced use of OP_Return” have caused a drop in fees not seen for more than a decade.
Glassnode Principal Analyst James Check agreed with Thorn, explaining to Cointelegraph that “transaction bundling and Segwit are certainly part of the factors,” because the combination will increase the number of transactions that fit in a block, and therefore This will increase performance and decrease commission pressure.
He shared the graph below to show that Segwit adoption “increased significantly from the lows of May-July.”
However, Check continues: “This is not the whole story”:
“The main reason I think commissions are low is that we had a 50% price crash in May, which absolutely decimated retailer interest.”
He suggests that “the three [comisiones, direcciones activas y recuento de transacciones] collapsed after the May sale.
“This, in my opinion, was the likely start of a bear market and even with the price going up, we saw a lot of people burnt out financially, and therefore out of the market.”
Eric Yakes, author of The 7th Property: Bitcoin and the Monetary Revolutiontold Cointelegraph: “We are witnessing a structural change in market dynamics and historical correlations hold little value.”
As for the future of the network, the “$70 million raised by Lighting Labs to build a stablecoin and asset protocol” is a key development for the Bitcoin protocol. He added that “it is important that transaction fees tend to decrease, as they are the main limitation to scale a network in a decentralized way.”
Ultimately, while transaction fees are a boon for Lightning channel opening and wallet management, it could be a sign that retailer interest has dried up. For Check, “you don’t have to look beyond old Google trends to see how popular the orange coin is today,” suggesting “there is almost no influx of new users.”
Yakes has the last word on the appearance of Bitcoin:
“Bitcoin needs the Lightning Network to continue its pace of growth and a thriving smart contract development network to emerge.”
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