Average Bitcoin transaction fees continue to rise after halving, caused by an already overloaded transaction backlog
Average transaction fees on the Bitcoin network reached a new 11-month high. According Bitinfocharts data, the average fee paid for the Bitcoin transaction reached $ 5.16 on May 14 – a phenomenon not witnessed since June 2019.
The average transaction cost increased by 168% in just the previous four days. Bitcoin rates have been increasing since the turn of the year – and especially since halving.
Seen below, average BTC rates have increased by a surprising 1,742% since January 1. However, most of that growth started on April 28 – exactly two weeks before Bitcoin’s halving.
Transaction fees typically increase when the Bitcoin network goes through periods of intense use. Competition for space in Bitcoin blocks causes a rush to the top in transaction fees as users compete to have their transactions included in the next block.
Another proof that Bitcoin is facing a mini overload is supported by mempool data from Blockchain.com. The graph below shows how many megabytes of transactions await confirmation by Bitcoin miners.
Just over two weeks ago, 80MB of transactions were suffocating the network. Although that number decreased, he was unable to stay. The steady flow in the size of the mempool suggests that Bitcoin has had few opportunities to rest in the past 30 days. More than 56 MB of data remains unprocessed at the time of writing.
The anticipation surrounding Bitcoin’s halving would have seemed a likely explanation for the sudden flow of BTC activity in recent weeks. However, the backlog of transactions (which will take hours or even days to be released) continued to happen.
The increase in average transaction fees forces users to choose between sending fast, but expensive – or cheap, but slow transfers.