Rising Transaction Costs for Bitcoin and Ethereum
In the past three weeks, the transaction costs for bitcoin (BTC) have surged, reaching a peak of $15 per transfer just three days ago. Similarly, the cost to transfer ethereum (ETH) has also increased significantly. From October 22 to November 12, 2023, the average fee for ethereum transactions soared by 219%, increasing from $2.08 to $6.64 per transaction.
Ethereum Transfer Costs Escalate by 219% in Less Than a Month
The spike in ethereum (ETH) fees mirrors the uptrend seen in bitcoin’s transaction fees, as the expense associated with the gas required for transferring the digital currency has escalated in this period. At present, the average fee for an ether transaction stands at $6.64, with the median fee at 0.0013 ETH, or $2.70 per transaction.
Interestingly, the cost to transfer ether aligns closely with bitcoin’s transfer fees, with both average and median charges for ETH transactions paralleling those for bitcoin. However, a distinct variance emerges when conducting other types of operations on the Ethereum blockchain, such as engaging with a smart contract.
As a result, exchanging an ETH-based asset on a decentralized exchange (dex) platform can incur a fee ranging from $27.77 to $28.50 per transaction. Similarly, the expense for conducting a non-fungible token (NFT) transaction fluctuates between $46.93 to $48.16.
Fluctuating Costs and Transaction Volume
On Sunday, November 12, the cost of transferring assets across different chains via bridging was an estimated $8.93 to $9.17. From October 22 to November 11, 2023, Ethereum has processed an average of roughly 1,071,448 transactions daily.
Comparison Between BTC and ETH Transactions
Looking at the ETH and BTC ‘Flippening Watch,’ BTC still leads ETH in market capitalization, daily trading volume, and the 24-hour fees collected by validators compared to what BTC miners earn. Regardless of the perspective, transactions on these two blockchains are significantly pricier than their other layer one (L1) counterparts.
Hot Take: The Impact of Rising Transaction Costs on Bitcoin and Ethereum
The significant surge in transaction costs for both bitcoin and ethereum has raised concerns about the accessibility and affordability of using these cryptocurrencies for everyday transactions. As these costs continue to rise rapidly, it may deter users from engaging in regular transactions or utilizing decentralized applications on these blockchains due to high fees.
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