According to CryptoFees, Bitcoin transaction fees spiked sharply in early May, reaching their highest level in two years. From late April to early May, a total of $3.5 million was paid in fees on the Bitcoin blockchain, a 400% increase. It is estimated that the average Bitcoin transaction fee reached $7.2, according to YCharts.
Meme coins like Pepe Coin (PEPE) are causing Bitcoin’s transaction costs to rise to multi-year highs as a result of their ongoing trading frenzy.
The recent rise in BTC transaction fees is thought to be mostly attributable to an increase in BRC-20 transaction activity. BRC-20 transactions accounted for 50% of all Bitcoin transactions on May 2, according to Galaxy Research.
With BRC-20, users can issue and transfer fungible tokens on the Bitcoin blockchain based on Ethereum’s ERC-20 token standard. By a pseudonymous on-chain analyst going by Domo, the standard was released in March 2023.
The BRC-20 token standard has quickly emerged as a prominent trend in the cryptocurrency sector, particularly in light of the rapid expansion of the PEPE meme coin. Over the last seven days, the token has increased by more than 600%, reaching an all-time high of $0.00000216 on May 5.
The Bitcoin blockchain is not the only one that has been impacted by the ongoing meme coin frenzy. Gas fees on the Ethereum blockchain have recently skyrocketed to multi-month highs.
According to CryptoFees, on May 2, ETH transaction fees totaled well more than $19 million, a number not seen since May 2022. At the time of writing, the Ethereum blockchain was the most expensive network in terms of transaction costs.
Despite the recent increase in Bitcoin transaction fees, current BTC transaction costs are still much below all-time highs. The highest Bitcoin transaction fees ever recorded were in April 2021, when the average BTC transaction cost nearly surpassed $70 due to a significant drop in the Bitcoin network hash rate. The previous peak in BTC transaction fees occurred in 2017 when transaction charges surpassed $60.