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In March, bitcoin miners amassed an unprecedented level of revenue not seen in the previous 12 months, hitting a high of $2.01 billion from rewards and transfer fees. Of this total, $85.81 million was earned from transaction fees over the past month. Historic Month for Bitcoin Miners — Income Peaks at $2 Billion As we […]
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Bitcoin Miners’ Earnings Hit Record $2 Billion in March Ahead of Halving Event
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Bitcoin transaction fees hit decade lows, here’s why
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It’s a great time to move Bitcoin (BTC) between wallets and exchanges. Bitcoin transaction fees have hit all-time lows in BTC, according to research by Galaxy Digital.
#bitcoin fees are at all-time lows. the craziest thing? fall 2021 was the first bull run not accompanied by a major spike in fees.
how is that possible? what does it mean? here’s a thread explaining the most confounding (and awesome) chart in bitcoin. (remember june 2021) pic.twitter.com/gnWssTckX2
— Alex Thorn (@intangiblecoins) April 5, 2022
As shown on the graph below, the Bitcoin mean transaction fee has plummeted to 0.00004541 Bitcoin ($2.06) in 2022, while the median is 0.00001292 Bitcoin ($0.59) which is the lowest of any year except 2011, according to the report.
Graph to show the fees trending down since 2013. Source: Galaxy Digital According to Alex Thorn, head of firmwide research at Galaxy Digital, a combination of growing Segwit adoption, batching transactions, growth in the Lightning Network, a collapse in miners selling and the “reduced OP_Return usage” have caused the drop in fees not seen for over a decade.
Lead on-chain analyst at Glassnode, James Check, agreed with Thorn, explaining to Cointelegraph that “batching and Segwit are certainly part of the mix,” because the combination will increase the number of transactions that fit in a block, and thus increase throughput and decrease fee pressure.
He shared the following graph to show that Segwit adoption “increased significantly at the May-July lows.”
Source: Glassnode Nonetheless, Check continues, “This is not the whole story…”:
“The number one reason I believe fees are low is we had a 50% collapse in price in May which absolutely decimated retail interest.”
He suggests that “all three [fees, active addresses and transaction counts] collapsed after the May sell-off.”
Fees (orange), active addresses (blue), transaction counts (purple), and BTC price (gray). Source: Glassnode. “This, in my view was the likely commencing of a bear market and even with the price run-up, we saw a great many people financially burned, and thus out of the market.”
Eric Yakes, the author of The 7th Property: Bitcoin and the Monetary Revolution, told Cointelegraph, “We’re witnessing a structural change in the market dynamics and historical correlations maintain little value.”
Regarding the future of the network, the “$70M raised by lighting labs to build a stablecoin and asset protocol,” is a key development for the Bitcoin protocol. He added that “it’s important for transaction fees to trend lower as they are the primary limitation to scaling a network in a decentralized manner.”
Related: Bitcoin Lightning Network growth capacity plateaus at 3,400 BTC
Ultimately, while transaction fees are a boon for wallet admin and opening lightning channels, it could be a sign that retail interest has dried up. For Check, “look no further than ye olde Google trends to see just how popular the orange coin is right now,” suggesting that “there is near zero inflow of new users.”
Google trends search interest for Bitcoin has trended lower since the April/May peak. Yakes has the last word regarding the emergence of Bitcoin:
“Bitcoin needs the lightning network to continue its pace of growth and a thriving network of smart contract development to emerge.”
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Why Bitcoin Could Hit $90K By End Of 2022, According To This Prediction
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The price of Bitcoin has been recovering after a major slump into the low $30,000s. As of press time, BTC trades at $37,774 with a 1.9% profit in the last 24-hours and could see more gains in the short term.
Related Reading | Fidelity Says What We’ve Been Thinking: Countries & Central Banks Will Buy BTC
BTC on a downtrend in the 4-hour chart. Source: BTCUSD Tradingview Bitcoin’s most recent recovery could be tied to the relief in the traditional market. At the time of writing, the S&P 500 Index records a +105 points or 1.44% profit in the 4-hour chart.
The cryptocurrency has displayed high levels of correlations with U.S. stocks and could continue to track them in the short term. In that sense, Bitcoin bulls could find backup on a sustained stock relief rally.
Data from Material Indicators shows some resistance, in lower timeframes, above BTC’s price current levels. Therefore, $39,000, and $40,000 have become important resistance levels that need to turn into support.
In case of further downside, Material Indicators records around $3 million in biding orders for Bitcoin near $36,000. These levels could operate as critical support on a bearish scenario, for lower timeframes, and must hold in order to prevent a re-test of previous lows near $33,000.
In the coming months, the bullish momentum could resume at full force, according to a report conducted by Finder. After consulting with a panel of 33 experts on the potential price scenarios for Bitcoin across multiple timeframes.
The consensus amongst these experts is bullish, a prediction that defies current market sentiment. The potential increase in interest rates by the U.S. Federal Reserve could operate as a headwind for Bitcoin. At least, this seems to be the dominating narrative for some market operators.
A Bitcoin Rally Before Another Multi-Year Bear Market?
As seen below, the experts have progressively flipped their bias from bullish for the better part of January, to neutral in the past week, and bearish for the week of February 6, 2022. The potential impact from the interest rates hike by the FED, the experts say, will remain a top concern for investors during the first part of the current year.
(The) first half of 2022 will be dominated by concerns over higher interest rates, which will impact all risk assets including Bitcoin. We wouldn’t be surprised to see Bitcoin decline a further 30% from current levels.
In that sense, over 50% of the interview panel believe Bitcoin could come out on top on an increasing interest rate scenario. The experts believe BTC’s price will peak at $93,717 in the next months, only to return to a $76,360 by the end of 2022.
Source: Finder’s Bitcoin Price Predictions Report Related Reading | Bitcoin Bearish Signal: Binance Observes Massive Inflow Of 10k BTC
BTC’s price rally will be drive by more inflation. As NewsBTC has been reporting, Mike McGlone, Senior Commodity Strategist for Bloomberg Intelligence, has a similar point of view and has claimed the cryptocurrency will start to outperform stocks, and other risk-on assets. Finder’s panel added:
It is possible that the asset bubble the Fed created by keeping interest rates near 0% for over a decade may spill over into Bitcoin. However, the cryptocurrency has the gold-like fundamentals and trust to weather the storm better than its peers.
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