As per CoinGecko, the dip in Bitcoin transaction fees appears to have been fueled by a drop in entire cryptomarket activity, with dailytrading volumes dropping from over to $30 billion as of today, from $67 billion on May 10.
The average trade fees paid for utilizing Bitcoin (BTC) or the Ethereum (ETH) mainnet have often skyrocketed to record amounts in the past few months, thanks to the stratospheric 2021 cryptomarket bull rally. The revelation made by Tesla on February 8 revarding its $1.5 billion investment in Bitcoin was soon followed by quadrupling of Bitcoin fees in the next two weeks.
The announcement caused a rush in crypto speculation, with the price surging to a new high of $54,410 after breaking above the earlier all-time high of $40,000. According to CoinGecko, Bitcoin (BTC) 24-hour volume recorded a near 100% increase to $57 billion on February 7, the day before Tesla revealed its investment in Bitcoin, to $101 billion on February 23.
Soon after Bitcoin attained a fresh all-time high of $64,804 on April 14, the average fee of Bitcoin soared to reach $62.77 on April 21. Bitcoin fees peaked on April 21 as the markets began to show signs of weakening, with traders racing to cash out near the all-time highs. According to data provided by YCharts, average Ethereum costs have decreased from a high of $72.21 on May 20 to just $4.80 now, a 93 percent decline in less than two weeks.
Average costs increased from $3.50 at the start of the year to roughly $40 by the end of February, owing to growing popularity of Ethereum-powered decentralized finance and nonfungible coins. While the April Berlin hard fork attempted to regulate the fee markets, a speculative rush around Shiba Inu (SHIB) as well as other ERC-20 animal tokens caused more bottlenecks on the Ethereum mainnet, driving fees to new highs last month.
On May 19, Ethereum transaction charges reached a fresh all-time peak of $71.21. The increase was attributed to a flurry of traders looking to liquidate leveraged positions on-chain amid falling crypto prices. At the height of the market upheaval, complicated smart contract trades suffered costs that were over ten times the norm, with CoinShares chief strategy officer Meltem Demirors claiming to have spent over $1,000 for a single transaction.
