Transaction fees for Bitcoin and Ethereum have fallen 81% and 71% respectively in the past few weeks as the broader cryptocurrency market continues to slide from its recent all-time high.
The average cost of using the Ethereum blockchain fell from $ 69.92 per transaction on May 12 to $ 20.06 by May 16, according to Bitinfocharts. Over the same period, the spot price for Ether (ETH) hit and fell from an all-time high of $ 4,358 on May 12 to $ 3,183 just before release – a 27% drop.
Before the market surge in 2021, the current $ 20 average fee on Ethereum would have been an all-time high by far. In 2020, the average usage cost was less than $ 0.10. The rapid rise in the cost of using Ethereum can be attributed to the emergence of decentralized finance apps, which now make up four of the five largest gas burners on the blockchain, and the increased attention given to the blockchain in the wake of the market boom in 2021 .
The daily number of users of Ethereum has quadrupled since the beginning of 2020 and, according to Bitinfocharts, has increased from around 400,000 to 1.6 million. This number does not take into account transactions that take place on Ethereum’s Layer 2 protocols.
A similar trend was seen in Bitcoin, where transaction fees have dropped 81% since mid-April when the BTC coin price was close to $ 65,000. The average transaction cost of around $ 62.77 marked a new all-time high for BTC, beating the 2017 high of $ 55.
Bitcoin was priced at $ 42,440 early Monday morning, down 34% from its most recent high in April. Bitcoin dominance, which measures Bitcoin’s share of total cryptocurrency market capitalization, fell to 39.9% on Monday and fell from a high of 70% in December.
While this number generally indicates a swelling altcoin market, it can also be misleading due to the difference in the size of the crypto market capitalization at different times. For example, Bitcoin’s market dominance was close to 90% in 2017, but its global market cap was only $ 2 billion, or 0.1% of today’s market cap. At the same time, global market capitalization can easily be increased by anyone who takes the trouble to launch any token with a high supply and even just a modest starting price.