- Transaction costs for Bitcoin have reached an all-time low.
- Fees have been reduced because of the Lightning Network, batching, miner behaviour, and protocol enhancements.
- Bitcoin is undergoing a fundamental shift in market dynamics, and prior correlations hold little weight.
Many people have lately discovered that the conditions are ideal for moving Bitcoin (BTC) between wallets and exchanges, as the Lightning Network, batching, miner behaviour, and protocol upgrades are driving down costs.
According to Galaxy Digital’s analysis, Bitcoin transaction costs have reached an all-time low. According to the study, Bitcoin transaction costs have dropped to 0.00004541 BTC ($2.06) in 2022, while the median is 0.00001292 BTC ($0.59). Except for 2011, this is the lowest of any year.
According to Galaxy Digital’s head of firmware research, Alex Thorn, the decrease in fees could be due to increasing SegWit acceptance, batching transactions, growth in the Lightning network, a decline in miners’ selling, and “lower OP Return use.”
Glassnode’s James Check, a lead on-chain analyst, concurred with Thorn, explaining that “batching and SegWit are undoubtedly part of the mix” because this combination would boost the number of transactions that can fit into a block. This boosts throughput while decreasing fee pressure.
Check said, “the number one reason I feel fees are low is because we had a 50% drop in pricing in May, which really devastated retail interest.”
According to Check, following the May sell-off, fees, active addresses, and transaction counts all plummeted.
Eric Yakes, author of “The 7th Property: Bitcoin and the Monetary Revolution,” also commented on the fee decrease. “We’re experiencing a structural change in market dynamics,” says Yakes, and “past correlations have limited validity.”