All-time high: Bitcoin average transaction fees at $195 for the first time

Bitcoin (BTC) trades in a 3-month price range with a yearly low exchange volume and an all-time low on-chain volume. Yet, Bitcoin’s 24-hour average transaction fees reached a new all-time high of $195 on June 8, at block height 847015.

Finbold retrieved data from the mempool.space node showing stats from the last 144 blocks, or approximately 24 hours. Notably, miners received 821.46 BTC, worth $57 million in this period, with an average of 2.5796 BTC per block, worth $179,029.

This drove the daily average transaction fee on the Bitcoin network to 281,030 sats, or $195. Sats refer to the smallest BTC unit, named after the cryptocurrency creator Satoshi Nakamoto.

Essentially, current data means that the last 144 Bitcoin blocks only included transactions with this average extra payout to miners.

Bitcoin average transaction fees historical data

Putting in perspective, the network reached a previous high of $127.97 per transaction on April 20, during the halving. Before that, the network saw average fees above $60 for the first time in April 2021, during the bull cycle.

On June 7, data from BitInfoCharts show a daily peak at $83.74 per transaction. Interestingly, Vini Barbosa registered a previous average of $65.76 at 10 pm UTC, in a post on X.

OKX consolidation spiral

Notably, Bitcoin on-chain analysts have spotted a UTXO consolidation spiral from the crypto exchange OKX.

OKX now has 974 consolidation transactions left in the mempool, with the following combined stats:

– 42.4 MvB total vsize
– 146100 inputs
– over 57 BTC in fees
– recovered value of 730 BTC https://t.co/GR2HIRXs9q

— mononaut (tx/acc) (@mononautical) June 7, 2024

According to multiple sources, the recent average transaction fee hike on Bitcoin was caused by this activity, with OKX outbidding itself while paying higher fees for each transaction.

Technically, Bitcoin fees increase when there is more demand for a limited space on its blockchain. Thus, users compete and outbid each other to convince miners to increase their transactions in the next block. The more congested and demanded the Bitcoin network is, the higher the fees can go.

The BTC protocol is currently intentionally designed to have a small block size and a 10-minute time interval between each block. Other cryptocurrencies solve the fee issues in different ways. For example, Bitcoin Cash (BCH) increased the block size, Litecoin (LTC) diminished the block interval, Monero (XMR) mixed both, and Nano (XNO) securely removed fees from the equation.

As Bitcoin fees now reach an unprecedented value in dollars and the risks of a sell-off become imminent, the market awaits to see if the demand for block space will drop and the average cost will drop to lower levels.

Source