Crypto Market Turmoil Sees Bitcoin and Ether Transaction Fees Plummet to Multi-Month Lows
Summary:
In June 2024, transaction fees for Bitcoin and Ether dropped to their lowest point in several months amidst a turbulent week in the cryptocurrency market. The Bitcoin transaction fee decreased to $1.93 per transaction, while Ether fees dropped to a historical low of 1 gwei. The reduction in Ethereum gas fees is attributed to the shift in activity from Ethereum’s base layer to its layer 2 network after the March Dencun upgrade. The drop in transaction fees coincided with a market slump, with Bitcoin price falling below $63,000 and multiple altcoins experiencing double-digit falls.
In the midst of a turbulent week in the cryptocurrency market in 2024, transaction fees for Bitcoin and Ether had plunged to the lowest in several months. On June 23, the average Bitcoin transaction fee dropped down to $1.93 for each transaction, representing the lowest point since October 2023. This diminution in the Bitcoin network's gas fee signifies less network activity and competition.
During periods of elevated market volatility, particularly when the value of assets increases, transaction fees on the Bitcoin network tend to escalate. These rises come as a result of heightened competition for block space due to increased price speculation. Except for the 2021 bull run, every major upswing since 2012 saw a corresponding increase in transaction fees. Notably, the 2021 bull run saw Bitcoin's price peak at $69,000, but the transaction fees remained relatively stable.
In parallel to Bitcoin, Ether (ETH) has also seen a drop in gas fees, hitting a historic low with gas prices falling to as low as 1 gwei - the lowest seen in years. The current Ethereum network gas fee stands around 4.5 gwei. It's worth noting that gwei, a unit of Ether, is used on the Ethereum network to facilitate the exchange of goods and services. One gwei equals one-billionth of one ETH.
The reduced Ethereum gas fee is credited to the shift of activity from Ethereum’s base layer to its layer 2 network following the Dencun upgrade in March. Following this upgrade, average gas prices on Ethereum have been reduced by approximately 92%. Data from Layer2 Insider reports that layer 2 networks brought in $950,000 in the past week.
The decrease in transaction fees on the top two crypto networks coincides with one of the roughest weeks for the crypto market in 2024. Bitcoin's price slumped below the $63,000 mark, triggering a double-digit drop in numerous altcoins. Over the course of the last six months, the crypto market has seen considerable growth with leading cryptocurrencies such as Bitcoin and several altcoins reaching their all-time highs. Over the past few weeks however, bearish trends have dominated the market, resulting in significant losses in the leveraged market and considerable losses for spot holders.
Published At
6/24/2024 12:02:42 PM
Disclaimer: Algoine does not endorse any content or product on this page. Readers should conduct their own research before taking any actions related to the asset, company, or any information in this article and assume full responsibility for their decisions. This article should not be considered as investment advice. Our news is prepared with AI support.
Do you suspect this content may be misleading, incomplete, or inappropriate in any way, requiring modification or removal?
We appreciate your report.