[Bitcoin fees top $100 for first time; sell-off coming? 】
Recently, the average transaction fee for Bitcoin (BTC) exceeded $100 for the first time on April 20, a change that occurred in the wake of the Bitcoin halving event. Due to rising transaction costs, many investors are unable to conduct effective trading activities.
According to data obtained by Finbold from mempool.space, the average Bitcoin fee reached $105.69 in the past 24 hours, with each transaction costing approximately 166,150 satoshis, or 0.00166150 BTC. Currently, Bitcoin miners charge more than 1,072 Satoshi/vB, which means even a small Segwit transaction costs $100.
The previous record for Bitcoin transaction fees was $62.78, which occurred three years ago on April 21, 2021. Miners generally view transaction fee increases as a positive, especially after halving, and become a way to compensate for block subsidy decreases.
However, the situation is now disadvantageous for users, investors and traders, as each operation requires a fee of more than $100. This is especially difficult for users with tiny balances, as their account balances or UTXOs fall below the fee threshold and cannot make transactions. According to BitInfoCharts, 53.94% of Bitcoin addresses hold less than 0.001 BTC.
Additionally, many cryptocurrency traders and investors are forced to leave their funds on centralized exchanges due to high withdrawal fees, which affects their willingness to convert Bitcoin to fiat or other cryptocurrencies.
The increase in Bitcoin transaction fees is primarily due to the increased demand for limited space on the blockchain, causing users to bid higher to have transactions included in the next block. The Bitcoin protocol is designed with one block every 10 minutes, and each block is limited in size.
Now, with transaction fees reaching record levels, the market is closely watching whether block space demand will fall, bringing average costs back to lower levels. At the same time, Bitcoin’s high transaction fees are forcing users to pay four times the average global daily revenue per transaction.
