Ethereum Transaction Fees Have Dropped To Their Lowest Level Since December 2020
The crypto market’s slump has also taken its toll on transaction fees, with Ethereum fees finally falling to levels not seen since December 2020, while Bitcoin fees have remained around the same for the previous year.
On the Ethereum side, the low was hit last Sunday, when the median transaction cost fell to USD 0.87, before increasing slightly to USD 1.142 by Tuesday. Ethereum transaction costs were last lower than this week on December 6, 2020, when they dropped to USD 0.66 per transaction.
The Ethereum network has struggled with soaring rates for much of 2020 and the first half of this year, leading some users to complain that the network had priced out certain activities. Now, transaction fees are at historically low levels.
On May 12 of last year, when the median charge level reached USD 37.89, Ethereum transaction fees achieved an all-time high. Back then, a mania for non-fungible token (NFT) trading was a major contributor to the exorbitant costs, as traders were eager to pay up to acquire rare works of digital art.
Along with the decrease in fees, the number of transactions per day on Ethereum has decreased. The transaction count dropped from 1.717 million on May 9 last year to 1.152 million on Monday this week.
The previous year has seen Bitcoin transaction costs remain very low and consistent, ranging between USD 0.3 and USD 1. The median charge level experienced a sharp decline in April of last year, dropping from a peak of USD 28.39 on April 21 to just USD 0.23 on July 24 of that same year.
The average Bitcoin transaction fee dropped to USD 0.33 on Sunday before somewhat increasing to USD 0.4 on Monday of this week.
Similar to Ethereum, Bitcoin has experienced a drop in the daily volume of transactions. As of Monday this week, the count had decreased to 240,242 from a high of 397,207 in January 2021.
The striking disparity between the transaction fees for Bitcoin and Ethereum demonstrates that demand for Ethereum block space has remained high for a large portion of the current bear market. Notably, despite the growth of additional Layer-2 networks like Optimism and Arbitrum, which assist ease congestion on Ethereum’s primary blockchain, that need has continued.Continue Reading