Bitcoin transaction fees saw a significant increase in early May, reaching their highest level in the past two years, as per data from Crypto Fees. On May 3rd, fees paid on the Bitcoin blockchain totalled $3.5 million, surging around 400% since late April. According to YCharts, the average Bitcoin transaction fee rose to $7.2.
The ongoing popularity of memecoins like Pepe Coin (PEPE) has led to an undesired consequence for Bitcoin – driving its transaction costs to multi-year highs.
The recent increase in BTC transaction fees is primarily due to a surge in Bitcoin activity involving BRC-20 transactions. According to data from Galaxy Research, 50% of all Bitcoin transactions on May 2nd were related to BRC-20 transactions.
The BRC-20 token standard, modelled after Ethereum’s ERC-20 token standard, is an experimental token standard that allows users to issue and transfer fungible tokens on the Bitcoin blockchain. Introduced in March 2023 by a pseudonymous on-chain analyst known as Domo, the BRC-20 token standard has become a major trend in the cryptocurrency industry, particularly due to the rapid growth of the PEPE memecoin.
Gas fees on the Ethereum blockchain have also been skyrocketing to new multi-month highs recently due to the ongoing memecoin frenzy. On May 2nd, ETH transaction fees reached a total amount of over $19 million, the highest level seen since May 2022, based on data from Crypto Fees. At the time of writing, the Ethereum blockchain remains the most expensive network in terms of transaction fees.
Even with the recent increase in Bitcoin transaction fees, the current BTC transaction cost is still far from its all-time high levels. The highest Bitcoin transaction fees were recorded in April 2021, with the average BTC transaction fee almost reaching $70, amid a significant decline in the Bitcoin network hash rate. The previous highest point in BTC transaction fees was in 2017, with transaction costs surging above $60.
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