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Bitcoin transaction fees experienced a significant increase in early May, reaching their peak in the last two years, as reported by Crypto Fees.
On May 3, the total fees incurred on the Bitcoin blockchain amounted to $3.5 million, marking a rise of approximately 400% from late April. The average fee for Bitcoin transactions peaked at around $7.2, according to YCharts.
The current trading surge of memecoins such as Pepe Coin (PEPE) has led to an unintended effect on Bitcoin (BTC) — elevating its transaction expenses to levels not seen in several years.
Total Bitcoin transaction fees from May 2021 to May 2023. Source: CryptoFees
The recent rise in BTC transaction fees is mainly linked to an increase in Bitcoin activity associated with BRC-20 transactions. Data from Galaxy Research indicates that 50% of all Bitcoin transactions on May 2 were connected to BRC-20 transactions.
Inspired by Ethereum’s ERC-20 token standard, BRC-20 is an experimental token framework that enables users to create and transfer fungible tokens on the Bitcoin blockchain. This standard was launched in March 2023 by a pseudonymous on-chain analyst known as Domo.
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The BRC-20 token standard has rapidly gained traction within the cryptocurrency sector, particularly amid the notable rise of the PEPE memecoin. The token has surged over 600% in the past week, achieving its peak price of $0.00000216 on May 5.
PEPE 30-day price chart. Source: CoinGecko
The Bitcoin blockchain is not the sole network impacted by the current memecoin excitement. Gas fees on the Ethereum blockchain have also seen a significant rise, reaching new multi-month highs recently.
On May 2, ETH transaction fees totaled over $19 million, a level not observed since May 2022, according to Crypto Fees. At the time of writing, the Ethereum blockchain remains the most costly network regarding transaction fees.
Related: Bitcoin miners have earned $50B from BTC block rewards, fees since 2010
Despite the recent increase in Bitcoin transaction fees, the current cost of BTC transactions is still considerably lower than historical peak levels. The highest transaction fees for Bitcoin were recorded in April 2021, when the average BTC transaction fee nearly reached $70 during a significant drop in the Bitcoin network hash rate. The previous peak in BTC transaction fees occurred in 2017, with costs exceeding $60.
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