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Why is the Transaction fee falling rapidly on Bitcoin and Ethereum?

Why is the Transaction fee falling rapidly on Bitcoin and Ethereum

Bitcoin and Ethereum usage fees are dropping by 70 to 80% as the market slide continues. The fall is rapid as the coin prices of both recede from recent peaks.


Moreover, the transaction fees have fallen by 81% for Bitcoin and 71% for Ethereum, respectively, over the last few weeks. However, the broader Crypto market continues to descend, and the fee fall is increasing from its recent all-time high.


Bitinfocharts Data


According to the Bitinfocharts data, the average cost of using the Ethereum blockchain fell from $69.92 per transaction to $20.6.


Ethereum

During the same period, the Ether (ETH) spot price also peaked and crashed. Its price started falling from an all-time high of $4,358 on May 12 to $3,183 just before the publication, which is a 27% decline. However, Ethereum daily user count quadrupled since the beginning of 2020.


It started climbing from around $400,000 to $1.6 million. But these numbers do not account for all the transactions taking place on Ethereum’s layer two protocols.

Bitcoin


Bitcoin also faced a similar trend in which its transaction fee fell to 81%. However, the BTC coin price was close to $65,000. The average transaction cost was around $62.77, which marked a new all-time high for BTC. It also exceeded the 2017’s high of $55, which signaled the top of the Bitcoin bull run at the time.

Bitcoin was priced at $42,440 by early on Monday morning, which marks a 34% decline since its recent April peak. Moreover, the Bitcoin dominance, which measures Bitcoin’s share of the overall cryptocurrency market cap, fell to 39.9% on Monday.

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