The average Bitcoin transaction was almost 90 percent more costly every day of the week than the day before.
The cost of shipping Bitcoin is dangerously near to the yearly peak of $13.15 hit in late October 2020 with this boost.
Bitcoin fees have fluctuated over the last few months, plummeting following major spikes. The average fee would possibly revert to usual amounts within a few days if the pattern persists.
The current surge, however, is not a negative indication, especially provided that Bitcoin exceeded its 2017 price peak by nearly 20 percent, and its commissions are only at 25 percent of the record of that year.
Therefore the clear reason for high Bitcoin fees is Bitcoin’s worth. Many individuals continue to exchange Bitcoin, whether purchasing it with hopes that it will hit much higher rates, or cashing out because of concerns that Bitcoin will eventually go bankrupt, just as it did after its 2017 bull run.
Fees Not Yet at 2017’s High
The number, however, pales in contrast to the average transaction fee during the bull run of 2017. Bitcoin averaged $55 per transaction fee at the point, rendering it nearly impractical to use as “digital money” and being the ideal pretext for producing competing forks such as Bitcoin Cash, which offered lower fees and faster speed in return for larger block sizes.
This is not some random phenomena are the increasing payments. It has two significant explanations:
The price of Bitcoin has hit new levels because a transaction’s dollar cost continues to go up when each bitcoin token’s value grows.
Bitcoin is being used and sold ever further. However by default, the network has its own limits, and each block will hold just a limited amount of data. Transactions “fight” over a spot in the closest block as more people attempt to submit bitcoins. So the more cash anyone is able to pay the miners, the quicker it can validate their trade.
In early November, when Bitcoin’s price had started its rise, rising by around $2,000 in only a few weeks, the last time average Bitcoin fees rose to the rate observed today was.
With the maximum Bitcoin payments, December 2017 holds the record. Average fees reached highs of $50 at the height of Bitcoin’s bull market.
Fueled by Institutional Investors
For some time now, banks might have been looking closely at digital properties, but have been skittish about publicly saying something.
In the latter half of 2020, they already seem to be entering a general move to blockchain, involving payment giant PayPal (PYPL) and hedge fund mavens including Paul Tudor Jones and Stanley Druckenmiller.
The industry is seeing a rising list of lenders leaning towards crypto, beginning with technologically advanced Switzerland and Singapore, where some of the first major steps are taking place.
Recently, DBS Bank of Singapore revealed that its crypto trading and custody network (which is 10% controlled by the national SGX stock exchange) was ready to go live, rendering it a pioneer.
Swiss digital exchange SDX said it was working with Japanese bank SBI Holdings to establish a digital asset exchange in Singapore the same week as DBS made its announcement, but it would not be ready until early 2022, the companies said.
Gazprombank, an affiliate of the Russian energy conglomerate, went live with crypto-custody in Switzerland as a big milestone in October. The bank used institution-focused custody technologies from the Swiss METACO group, which works closely with Avaloq, the central banking software provider.