The Price of Bitcoin Drops as Transaction Fees Surge
The price of Bitcoin has fallen below $41,000, erasing the gains from the previous week. Currently, Bitcoin is trading at just over $40,600, down 2.9% in the last 24 hours and 3.9% for the week. This decline coincides with a surge in Bitcoin’s average transaction fee, which has reached a yearly high of $38.43.
Transaction Fees Soar Due to Growing Popularity of Bitcoin Ordinals
The increase in transaction fees is attributed to the rising popularity of Bitcoin Ordinals. These unique digital assets inscribed on a satoshi have led to miners earning nearly $10 million in transaction fees on December 16th and $8.4 million on December 17th.
Bitcoin Network Congestion
The high transaction fees caused by Ordinals have resulted in congestion on the Bitcoin network. Currently, there are almost 290,000 unconfirmed transactions, with transaction fees below $1.37 having no priority for confirmation.
Market Update: Avalanche and Meme Coins Experience Losses
In addition to Bitcoin, other cryptocurrencies have also seen declines. Avalanche has experienced the largest losses within the top 20 cryptocurrencies, trading at $37.28 and down over 11% in the past 24 hours. Ethereum, the second-largest cryptocurrency by market capitalization, is currently trading at around $2,100, down almost 4% for the day. Meme coins like Dogecoin, Shiba Inu, and BONK have been significantly affected by the market slump.
Hot Take: Market Volatility Persists as Transaction Fees Rise
The recent drop in the price of Bitcoin, coupled with the surge in transaction fees, highlights the ongoing volatility in the cryptocurrency market. As transaction fees continue to increase, it becomes more challenging for users to engage in cost-effective transactions. This congestion on the Bitcoin network raises concerns about its scalability and efficiency. Investors and traders should closely monitor these developments and consider the impact of transaction fees on their crypto activities.
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