- Bitcoin is currently leading in daily transaction fees, surpassing Ethereum for the first time in three years, just before a significant reduction event.
- The average transaction fee on Bitcoin has risen to over $18.69, representing an almost 1,000% increase from the fee observed on November 1.
- While increased transaction fees may be a pain for Bitcoin users, some market experts consider it a positive development.
Bitcoin Outperforms Ethereum Transaction Fees
The possibility of a spot Bitcoin exchange-traded fund (ETF) coming to the U.S. market has increased demand for the crypto king, providing additional income for BTC miners and leading to an increase in transaction costs. Bitcoin is currently leading in daily transaction fees, surpassing Ethereum for the first time in three years, just before a significant reduction event.
About three years ago, Ethereum had an advantage over Bitcoin in terms of transaction fees due to its versatile blockchain network that supported a wide range of decentralized applications. The usefulness of the world’s largest programmable blockchain attracted user activity, especially in the rapidly growing sectors of decentralized finance (DeFi) and non-fungible token (NFT) trading, leading to significantly higher transaction fees on the Ethereum network.
In terms of price, a Bitcoin is currently valued at $36,600. The leading cryptocurrency is rising on expectations that one of several Bitcoin ETF applications made by Wall Street giants like BlackRock is close to approval by the SEC. This likely contributed to BTC prices surpassing the $38,000 level.
Implications for Bitcoin Miners
While increased transaction fees may be a pain for Bitcoin users, some market experts consider it a positive development. They argue that higher fees strengthen the security of the Bitcoin blockchain.
Additionally, significantly expensive transaction activity is a boon for Bitcoin miners who secure and sustain the network, as they are rewarded with BTC fees to process user transactions. This is especially important for miners because Bitcoin’s halving event, which will cut block rewards in the industry by 50%, is approaching in April 2024.