Bitcoin (BTC) and ethereum (ETH) transaction fees rose 89% and 260% over the past month, as increased demand for BTC and ETH overloaded both blockchains with unprecedented traffic. Moreover, it seems that Ethereum’s problems are strengthening their rivals.
Kaynak: Adobe / Dušan Zidar
Bitcoin’s median transaction fee is currently at 13.75 USD, up 4.674% from a year ago when fees were only 0.288 USD. Ethereum’s median transaction fee is currently $ 12.94, up 22.443% compared to this time of last year.
While Bitcoin’s status as a store of value means it has less repercussions on high fees, Ethereum’s problems may be powering up competing chains and platforms such as Cardano (ADA) and Binance Smart Chain. As reported, Tron (TRX) is also happy with this.
7-day moving average. Source: bitinfocharts.com
The dodgy of all-time highs
Ethereum transaction fees have reached all-time highs in recent days, and this comes with numerous drawbacks.
Firstly, Coin MetricsDeFi users who say they “don’t want to pay excessive fees” to trade on decentralized exchanges, lock money to DeFi platforms, or transfer unique tokens (non-fungible tokens).
Ethereum’s average transfer value increases to an average of $ 312, with higher fees pricing smaller owners as well. This could indicate that some people are discouraged from transferring smaller amounts, or it might just show the rising price of ETH.
However, Coin Metrics noted that despite these fees, Ethereum usage remained generally high, with active addresses averaging around 600,000 per day since January.
As for BTC, even though their fee reached a three-year high, they didn’t set an all-time record (set in December 2017). As Bitcoin’s price (and ethereum prices) continue to rise, there is no sign yet that demand is decreasing significantly.
Also, if nothing else, the surge in transaction fees has provided more confirmation – if necessary – that Bitcoin is more of a store of value at this stage than a medium of exchange.
High transaction fees, which cost over $ 13, mean you have to be desperate to use Bitcoin to make small purchases.
While higher fees lead to longer confirmation times for BTC, they appear to have a number of more serious knock-on effects for Ethereum.
The past few weeks have seen the ‘Ethereum killer’ Cardano rise in the crypto asset rankings, with a rise of over 90% alone over the past seven days, becoming the fourth largest cryptocurrency by market cap. Cardano is using a fee structure based on ADA price, which is currently low enough (to $ 0.81) to keep fees relatively much lower than Ethereum.
At the same time, the popularity of platforms using alternative blockchains to Ethereum increased. Located on Binance Smart Chain and currently based on Ethereum SushiSwap A decentralized exchange that doesn’t struggle with higher fees like PancakeSwap This is the case for.
Today, PancakeSwap surpasses SushiSwap in terms of 24-hour volume, while Binance CEO Changpeng Zhao was delighted to express this on Twitter.
“Congratulations on passing Sushi. Low transaction fees pay off,” Zhao said. said.
Top 5 decentralized exchanges by trading volume:
It is still unclear how long this situation will last. While Ethereum 2.0 promises to lower gas fees, more centralized competitors will ultimately have to do more than less busy, if they want a larger share of the Ethereum pie.
At the time of writing (18:35) BTC is trading at $ 44,351 and dropped 5% in one day to lower its weekly earnings below 26%. ETH fell 3% to $ 1,696. It increased by 12% in one week.