BitInfoCharts data reveals that average Bitcoin (BTC) transaction fees reached the lowest level since January. While this is happening, the price of its respective crypto has been showing a downward behavior that worries many.
Some experts have let it be known that, when it comes to the price of the plummets, it is nothing more than cyclical. That is, they prepare the ground to reach their rank.
Average Bitcoin (BTC) transaction fees
Specifically, average Bitcoin transaction fees have dropped to lows of $ 7.26, an 88% drop in just six weeks. In contrast, they haven’t been this low since January. Certainly, the fees increase when the demand for processing transactions exceeds the supply of the miners.
Average Bitcoin transaction fee. Source: BitInfoCharts
However, rates drop when mining supply exceeds demand. The drop in fees suggests that Bitcoiners are not as keen on transacting as they were just over a month ago. Basically, Bitcoin miners aren’t that keen on processing transactions either.
To recall, in February 2021 Bitcoin fees almost tripled in two weeks, following the February 8 announcement that Tesla added $ 1.5 billion worth of Bitcoin to its balance sheet.
Likewise, the average price of Bitcoin fees rose again to an all-time high of $ 62.77 on April 21 after the BTC price surge. In fact, Bitcoin fees peaked on April 21 due to an increase in market activity.
Ethereum’s average fees
Similarly, Ethereum’s average transaction fees are at their lowest price since January, thanks to a general cooling in the crypto market. Global capitalization fell from peaks of about $ 2 trillion last month to current levels of $ 1.6 trillion.
In this way, transaction fees are one of Ethereum’s biggest weak points. They make some services prohibitively expensive for everyone except the wealthiest merchants to use.
To this end, the lower prices, fees, and hash power follow the government’s crackdown on Bitcoin mining in China, where most miners are located.
By the way, Huobi and OKEx have already started limiting certain transactions, and officials in Inner Mongolia are considering banning Bitcoin mining altogether.
In fact, a Huobi spokesman said the restrictions were a response to the government’s remarks. For its part, OKEx said its restrictions were intended to continue to comply with regulators.
With regard to Inner Mongolia, it has already started to crack down. The autonomous government of the region is reportedly considering adding Bitcoin miners to social credit blacklists and has proposed the revocation of telecom licenses for miners.
This means that illegal Bitcoin miners within the province, if caught, would face limited access to financial products, blockades for overseas travel, and more, according to sources.
I close with this phrase by Bill Gates: “Bitcoin is a technological tour de force.”