The mean fee for a transaction on the Bitcoin network just reached its highest level in almost two years, according to data presented by crypto on-chain analytics firm Glassnode. Friday saw the average transaction fee reach 0.00032814 BTC, up ten-fold from its 0.00003161 dip on April 23rd. Considering the current Bitcoin price of around $29,600, this would imply a transaction fee close to $10 – a significant increase from the average transaction price of under $1.0 on April 23rd.
Some analysts link this spike in network fees to the renewed meme coin craze, with coins like PEPE and SPONGE posting exponential gains in recent sessions. This surge in transactions is seemingly connected to the innovative BRC-20 tokens, which have been causing a stir in the Bitcoin community since their launch in March. Inspired by the successful ecosystem of Ethereum’s ERC-20 tokens, the BRC-20 standard allows users to issue and transfer fungible tokens via the Bitcoin blockchain.
However, this BRC-20 frenzy has brought about more than just a rise in network fees. The number of daily Bitcoin transactions hit an all-time high of roughly 680,000 earlier this week. Additionally, the increased fees are enticing Bitcoin miners to come online, pushing the Bitcoin network’s hash rate to an all-time high level of almost 440 Exahashes per second. The BRC-20 craze appears to be attracting new users to the network as well, with non-zero BTC balance addresses reaching a new record high of over 46 million.
In the long run, the strength in Bitcoin’s network and its expanding “use case” with the growing BRC-20 movement should serve as a tailwind for the world’s largest cryptocurrency by market capitalization. However, in the short term, Bitcoin seems to be more focused on macro and technical factors, such as the Federal Reserve’s rate tightening cycle coming to an end and the likelihood of a cutting cycling starting later this year. Additionally, the escalating US banking crisis could drive the Bitcoin price in the near future.
Historically, Bitcoin has performed well in environments with easing financial conditions, and since March, the cryptocurrency has benefited from a safe-haven status amid financial stability concerns. With near-term technicals looking strong and Bitcoin poised for a bullish breakout, holding above $30,000 in the coming days could potentially open the door for a swift return to yearly highs of $31,000 and beyond. As the cryptocurrency landscape continues to evolve, Bitcoin’s adaptation to new trends like the BRC-20 token standard and other innovations will likely remain a topic of interest for its community of followers.