Despite the latest hike in Bitcoin transaction fees, the current cost of BTC transactions is still far from all-time highs.
Bitcoin transaction fees skyrocketed in early May, reaching their highest point in the past two years, according to data from Crypto Fees.
On May 3, the total amount of fees paid on the Bitcoin blockchain reached $3.5 million, which is a jump of nearly 400% since the end of April. The average fee per Bitcoin transaction reached $7.2, according to YCharts.
The current trading frenzy for memecoins like Pepe Coin (PEPE) has triggered an unintended consequence for Bitcoin ( BTC ): its transaction costs rising to multi-year highs.
The latest increase in BTC transaction fees is mainly attributed to an increase in Bitcoin activity related to BRC-20 token transactions. According to data from Galaxy Research, 50% of all Bitcoin transactions on May 2 were related to BRC-20 token transactions .
Modeled after Ethereum’s ERC-20 token standard , BRC-20 is an experimental token standard that allows users to issue and transfer fungible tokens on the Bitcoin blockchain. The standard was introduced in March 2023 by a pseudonymous analyst for the network known as Domo.
The BRC-20 token standard has quickly become a major trend in the cryptocurrency industry , especially amid the strong growth of the PEPE memecoin. The token has appreciated more than 600% in the last seven days, hitting its all-time high of $0.00000216 on May 5.
The Bitcoin blockchain is not the only one affected by the current memecoin hype . Gas fees on the Ethereum blockchain have also skyrocketed to new multi-month highs recently.
On May 2, ETH transaction fees reached an aggregate amount of more than $19 million, a level not seen since May 2022, according to Crypto Fees. The Ethereum blockchain remains the most expensive network in terms of transaction fees at the time of writing.
Despite the latest spike in Bitcoin network transaction fees, the current BTC transaction cost is still far from its all-time highs. The highest Bitcoin transaction fees were recorded in April 2021, when the average cost of a BTC transaction almost reached $70 amid a significant decline in the Bitcoin network hash rate. The previous high point in BTC transaction fees was in 2017, with transaction costs exceeding $60.