According to Galaxy Digital, bitcoin transaction fees have reached their lowest point in a decade, so now’s a great time to transfer your bitcoin.
In the chart above, you can see that the average trading fee has fallen to 0.00004541 BTC ($2.06). Meanwhile, the median is 0.00001292 BTC (0.59 USD), the lowest value since 2011.
What is the reason for the fee decrease?
Galaxy Digital head of research Alex Thorn believes the reason for this decline is a combination of Segwit’s growing popularity, batching transactions, the rise of the Lightning Network, declining miner sales and “reduced OP_Return usage.”
According to Glassnode’s Chief On-chain Analyst, James Check, “batching and Segwit are certainly part of the mix.” This connection increases the number of transactions contained within a block, reducing the pressure on fees.
He shared the following chart, which shows that Segwit adoption “increased significantly during the May-July lows.”
Nevertheless, according to Check, “this is not the whole story…”:
The number one reason why I think the fees are low is that in May the price dropped by 50%, which absolutely decimated the interest of individual customers.
He suggests that “all three – fees, active addresses and number of transactions – collapsed after the May sale.”
Even after the price increase, we saw many people burned out financially and left the market. I believe that this was the beginning of a bear market.
In an interview with Cointelegraph, author Eric Yakes said:
Market dynamics are changing structurally, and historical correlations are no longer relevant.
Regarding the future of the network, he said:
Lighting Lab’s $70 million investment in a stablecoin protocol” is a key event for Bitcoin. It is important that transaction fees fall, as they are the main constraint to scaling the network decentralizedly.