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This is a great time to move Bitcoin between wallets and exchanges. According to a study by Galaxy Digital, bitcoin transaction fees in BTC reached record lows.
As in the chart below, the average transaction fee has plummeted to 0.00004542 Bitcoin ($2.06) in 2022, while the median number is 0.00001292 Bitcoin ($0.59), which is the lowest number in years minus 2011.
According to Alex Thorn, head of company-wide research at Galaxy Digital, the combination of increasing Segwit usage, batching transactions, lightning network development, miners stopping dumping and "declining OP_Return use" has caused transaction costs to fall unprecedentedly in the past decade.
James Check, head of on-chain analysis, agrees with Thorn, saying that "batching and Segwit are definitely one of the reasons." Because this combination will increase the amount of transactions in a block, and so increase throughput and reduce transaction fees.
However, Check continued: "The reason is not only that", "I think the first reason why prices are low is the 50% price drop in May 2021, which definitely reduces retail interest rates."
"All three factors (cost, address and transaction volume) fell after the May sell-off." "In my opinion, this is the beginning of a Bear market and even if prices go up many people have burned their accounts and been excluded from the market."
Eric Yakes, author of Assets 7: Bitcoin and the Currency Revolution, said: "We are witnessing a structural change in the market and previous correlations have almost no value."
As for the future of the network, "$70 million raised by Lighting Labs to build stablecoins and asset protocols" is the main development for the Bitcoin protocol. He added that "it is important for transaction fees to become lower because they are the biggest obstacle to network expansion in a decentralized protocol."
But ultimately, while transaction fees are a boon for wallet administrators and opening Lightning channels, this could be a sign that retail interest rates have dried up. As for Check, "just look at Google's trends to be able to see how popular Bitcoin is currently," he said, arguing that "the number of new users is almost nonexistent."
Yake stated, "Bitcoin needs the Lightning Network to continue its growth rate and develop a strong Smart contract network."