Bitcoins Average Transaction Fees Hit Record High of 195 for the First Time
Bitcoin (BTC) is currently trading within a three-month price range, experiencing a yearly low in exchange volume and an all-time low in on-chain volume. Despite this, the average transaction fees for Bitcoin reached a new all-time high of $195 on June 8, at block height 847015.
Finbold obtained data from the mempool.space node, analyzing stats from the last 144 blocks, equivalent to approximately 24 hours. During this period, miners received 821.46 BTC, valued at $57 million, with an average of 2.5796 BTC per block, totaling $179,029 each.
This surge in mining rewards led to a daily average transaction fee on the Bitcoin network of 281,030 sats, or $195. Sats represent the smallest unit of Bitcoin, named after the cryptocurrency creator, Satoshi Nakamoto.
In essence, the latest data reveals that the last 144 Bitcoin blocks exclusively included transactions with this elevated average payout to miners.
When put into perspective, the network had previously reached a high of $127.97 per transaction on April 20, during the halving event. This was followed by average fees exceeding $60 for the first time in April 2021, during the bullish cycle.
On June 7, data from BitInfoCharts indicated a daily peak of $83.74 per transaction. Notably, Vini Barbosa previously noted an average of $65.76 at 10 pm UTC in a post on X.
At the current average transaction fees, many addresses and Bitcoin users are unable to spend their coins due to the concept of “dust.”
On June 2, Finbold reported a separate milestone for the Bitcoin network as spot trading and on-chain transaction volume declined, while ETFs and derivatives dominated market interest for speculative demand. Santiment data showcased an all-time low 7-day transaction volume of 474,000 BTC and a diminishing spot trading volume.
Bitcoin on-chain analysts observed a UTXO consolidation spiral from the cryptocurrency exchange OKX. OKX currently has 974 consolidation transactions remaining in the mempool, with combined stats including 42.4 MvB total vsize, 146100 inputs, over 57 BTC in fees, and a recovered value of 730 BTC.
Sources indicated that the recent surge in average transaction fees on Bitcoin was a result of this activity, as OKX continuously outbid itself while paying higher fees for each transaction.
Technically, Bitcoin fees rise when demand for limited space on its blockchain increases. Users compete and outbid each other to persuade miners to include their transactions in the next block. The more congested and in demand the Bitcoin network becomes, the higher the fees will rise.
While Bitcoin’s protocol intentionally maintains a small block size and a 10-minute interval between blocks, other cryptocurrencies address fee issues differently. For instance, Bitcoin Cash (BCH) increased the block size, Litecoin (LTC) reduced the block interval, Monero (XMR) combined both strategies, and Nano (XNO) eliminated fees altogether.
As Bitcoin fees reach unprecedented levels in dollars and the threat of a sell-off looms, the market anticipates whether demand for block space will decrease, potentially leading to a decline in average costs.