Big #alert
Bitcoin fees above $100 for the first time; Sell-off incoming?
Bitcoin (BTC) average transaction fees crossed the $100 mark for the first time on April 20, following the halving event. As transaction costs rise, the majority of investors are either holding dust or unable to withdraw from exchanges.
Notably, Finbold retrieved data from mempool.space showing average Bitcoin fees of $105.69 paid in the last 24 hours. In BTC measures, users paid 166,150 sats or 0.00166150 BTC per transaction, on average, during this period.
Furthermore, Bitcoin miners mined the last four blocks with a fee rate above 1,072 sat/vB, translating to $100 for small Segwitt transactions. Sat (or satoshis) is Bitcoin’s smallest unit, named after its creator, Satoshi Nakamoto, while vB stands for virtual bytes—the measure used by the cryptocurrency‘s protocol.
Sell-off? Consequences of Bitcoin fees in USD above $100
Bitcoin miners usually see the fee increase as positive, considering these entities collect those fees. This dynamic gains more relevancy after the halving as a way to balance the reduction of the block subsidy
However, users, investors, and traders are mostly negatively affected, now paying above $100 for each activity. The negative consequences include holding dust balances, being unable to withdraw from exchanges, and diminishing the profit of Bitcoin’s DeFi ecosystem.
First, dust refers to account balances and UTXOs below the fee threshold, which effectively makes them unspendable. According to BitInfoCharts‘ rich list, 53.94% of all Bitcoin addresses hold something below 0.001 BTC.
At current prices, most balances are below $64, which is, effectively, dust with Bitcoin fees above $100.
