It is a great time for Bitcoin (BTC), to be moved between wallets or exchanges. According to Galaxy Digital research, Bitcoin transaction fees are at an all-time low in BTC.
#bitcoin fees have fallen to an all-time low. The most bizarre thing? Fall 2021 was the first bullrun without a significant spike in fees. How is this possible? What does this mean? Here’s a thread that explains the most confusing (and amazing) bitcoin chart. (remember june 2021) pic.twitter.com/gnWssTckX2
Alex Thorn (@intangiblecoins), April 5, 2022
The graph below shows that the Bitcoin mean transaction fees have plummeted from 0.00004541 Bitcoin ($2.06) to 0.00004541 Bitcoin in 2022. However, the median Bitcoin payment fee is 0.00001292 Bitcoin ($0.59), which is the lowest amount of any year, except 2011.
The graph below shows the trend in fees since 2013. Source: Galaxy Digital
Alex Thorn, Galaxy Digital’s head of firmwide research, said that a combination of increasing Segwit adoption, batching transactions and growth in the Lightning Network have all contributed to the drop in fees, which has not been seen in over a decade.
James Check, Glassnode’s lead on-chain analyst, said that he agreed with Thorn. He explained to Cointelegraph that Segwit and batching are “certainly part of the mixture”, because this combination will increase the number transactions that fit into a block and increase throughput, which in turn will decrease fees pressure.
The following graph was shared by him to show that Segwit adoption has “significantly increased at the May-July lows.”
Check says, “This isn’t the end …”:.”
“The main reason I believe fees should be low is that we experienced a 50% price collapse in May, which completely decimated retail interest.”
He suggested that all three [fees and active addresses as well as transaction counts] have collapsed following the May sale-off.
Fees (orange), active addresses(blue), transaction count (purple) and BTC price/gray Source: Glassnode. “This was, in my opinion, the likely beginning of a bear-market and even with the price rise, we saw a lot of people financially burned and so out of the market.”
Eric Yakes, author of The 7th Property, Bitcoin and the Monetary Revolution told Cointelegraph that “We are witnessing a structural shift in the market dynamics, and historical correlations retain little value.”
Concerning the future, the “$70M raised from lighting labs for a stablecoin protocol and asset protocol” is a significant development for Bitcoin protocol. He stated that transaction fees are the main limitation in scaling a network decentralizedly and it was important for them to trend lower.
Related: Bitcoin Lightning Network growth capacity plateaus around 3,400 BTC
Transaction fees can be a boon to wallet admin and opening lightning channels. However, this could indicate that retail interest is declining. Check out the Google Trends to find out how popular orange coins are right now. This suggests that there is almost no new user inflow.
Google Trends searches for Bitcoin have fallen since the April/May peak.
Yakes is the final word on the emergence Bitcoin
“Bitcoin requires a lightning network for its growth, and a vibrant network of smart contract developers to emerge.”