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Bitcoin fees skyrocket on spot BTC ETF hype

Bitcoin fees skyrocket on spot BTC ETF hype

The anticipation of a potential approval of a spot Bitcoin (BTC) exchange-traded fund (ETF) in the United States has led to increased demand for the major cryptocurrency, resulting in a surge in transaction fees.

On Nov. 16, the Bitcoin blockchain recorded $11.6 million in fees paid, as reported by CryptoFees. According to YCharts data, the average transaction fee is currently $18.69, marking a 113% increase from the previous day and a 746% increase from a year ago.

Bitcoin transaction fees between January 2023 and November 2023. Source: CryptoFees

Bitcoin, as per Cointelegraph’s market analysis, continues to trade near 18-month highs and above its bear market range. At the time of writing, the cryptocurrency is trading at $36,407, reflecting a 0.58% gain over the past 24 hours.

The rise in Bitcoin’s price follows the submission of a spot BTC ETF proposal by BlackRock to the Securities and Exchange Commission in June. This has prompted other major asset managers in the U.S. to submit similar proposals, including Fidelity, ARK Invest, and WisdomTree.

While the SEC is in discussions with the firms regarding proposal adjustments, a final decision has been deferred to January 2024. WisdomTree, ARK, 21Shares, Valkyrie, Bitwise, and VanEck all amended their Form S-1 filings on Nov. 16, possibly in response to concerns raised by the SEC, according to Bloomberg senior ETF analyst Eric Balchunas.

A spot Bitcoin ETF is an investment fund that mirrors the price of Bitcoin, with the underlying asset being actual Bitcoin purchases. This would allow investors to engage in Bitcoin’s market through regular brokerage accounts, without the need to purchase it on a crypto exchange.

It is expected that a spot Bitcoin ETF will attract institutional investors, potentially leading the price of Bitcoin to new highs in the near future. Bloomberg analysts have indicated a 90% likelihood of approval for all proposals in the same batch in January.

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