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As the crypto market experiences one of its worst weeks of 2024, Bitcoin and Ethereum transaction fees have plummeted to their lowest levels in months. On June 23, the average Bitcoin transaction fee reached $1.93 per transaction, marking the lowest level since October 2023. The low fees on the Bitcoin network indicate lower network activity and less competition.
Interest in Bitcoin Network Declines
Bitcoin network transaction fees often rise during times of high market volatility, especially when prices are appreciating. Increased price speculation leads to more competition for block space.
As a result, every major bull run since 2012, except for the 2021 bull run when Bitcoin’s price reached $69,000 but transaction fees remained relatively low, has resulted in a corresponding increase in fees.
What’s Happening in the Ethereum Ecosystem?
On the other hand, transaction fees in the Ethereum ecosystem have also reached a new low, with transaction prices dropping to 1 gwei, the lowest level in recent years. At the time of writing, the current gwei level on the Ethereum network was 4.5 gwei. Gwei is a unit of Ethereum and is used to buy and sell goods and services on the Ethereum network. One gwei is one-billionth of an Ethereum.
The low transaction fee on Ethereum is attributed to activities moving from Ethereum’s main layer to the Layer-2 network following the Dencun upgrade in March. Since the Dencun upgrade, average gas prices on Ethereum have dropped by approximately 92%. According to a report by Layer2 Insider, Layer-2 networks earned $950,000 last week.
The low transaction fees on the top two cryptocurrency networks come during one of the worst weeks for the crypto market in 2024. Bitcoin’s price fell below the $63,000 price support, while several altcoins experienced double-digit losses. Over the past six months, the crypto market has seen significant gains as leading cryptocurrencies like Bitcoin and several altcoins reached new all-time highs.
