Although Bitcoin has been on the move to test its 2017 highs, transaction charges remain low in combination of low on-chain transactions and declining retail speculation. The present fees of about $3.50 per transaction contrast dramatically with the fees incurred three years ago when sending any amount of BTC momentarily spiked above $50. However, the current rally was not followed by the same trading frenzy, which drove prices to about $20,000 in 2017. But average sales rates are currently close to $200,000.
Vitalik Buterin, Ethereum co-founder, does not think Bitcoin’s latest low fees last. In a Twitter thread, the co-founder of Ethereum indicated to the majority of users that an unavoidable rise in transaction costs would be: “Why do Bitcoin’s unique features matter given that any wide adoption scenario will lead to base chain fees pricing out most of those users and it’s proving hard to extend those features to the L2s intended to circumvent those limitations?”
However in the current environment, the data do not suggest that high fees are possible. It is necessary to remember the number of transactions processed, the size of these transactions and the amount of BTC kept in the long term to understand what is occurring in the background. The memory pool of Bitcoin, equivalent to a trade waiting room, displays the current amount of unconfirmed daily transactions at 38,900, just about 20 percent of the figures for 2017.
It should be noticed that not only is the number of transactions significantly lower than during the previous bull market, but there has been little spike in reaction to the price rise this time around. In fact, since the start of 2019, the seven-day moving average indicates an overall decrease. The average Bitcoin transaction exceeded the 2017 high of $150,000 in October. Ten days ago, the average is around $190,000, indicating that while the amount of transactions has declined, wealthier individuals or organizations are those that are still transacting.
This time around, Bitcoin users are also hodling their coins instead of transacting with them. The amount of Bitcoin held on exchanges has been shrinking rapidly. data from the analytics platform Glassnode Studio indicates, t he year-to-date shift is down 18 percent as of November 21.