Bitcoin’s per-transaction rates (BTC) have increased at a significant rate.
Why? What’s causing it? We’re telling you!
BitInfoCharts data reveals that the Bitcoin Union per transaction (BTC) rates have been increasing again; accumulating a growth of more than 255% during the last 30 days until October 26th. What’s been generating this?
Is Bitcoin on its way to a new annual high?
Bitcoin experiences high rates
A little over a month ago, on September 20th, BTC’s transaction fees stood at USD 1.39. This compares to USD 5.76 yesterday.
Therefore, we can see that, according to BitInfoCharts data, Bitcoin’s transaction fees have increased at an unparalleled rate.
On October 22nd it cost an average of $6.3 to process a transaction on the Bitcoin Blockchain, a level not experienced by the market since August 6th.
Quarterly chart of Bitcoin transaction fees. Source: BitInfoChartsQuarterly Bitcoin Transaction Fee Chart Source: BitInfoCharts BitInfoCharts
Glassnode also reported on Twitter today that the percentage of revenue that BTC miners earn from transaction fees increased to 22.25% in the last 24 hours; a level not seen since January 2018.
What have the Bitcoin whales been doing while BTC is reaching its annual high?
Does the price increase offer an explanation?
Soon the recent price increase that Bitcoin has experienced could be one of the main catalysts behind the rate increase.
In general, we could say that when prices rise, investors get excited and enter a mood characterized by FOMO.
The consequence of this is that it leads investors to be willing to pay a higher fee to the BTC miners as long as their transactions take place earlier than others. And, as a result, network congestion is generated that leads to higher average rates.
In this regard, let’s remember that on October 6, Bitcoin’s price stood at approximately USD 10,600. However, last week the leading crypto received a boost that placed it above USD 13,000.
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This possible explanation goes very much in line with the previous one and it is that the increase in price has been a catalyst for the interest generated by cryptomoney.
In the last few months we have reported from CryptTrend how institutional investors have entered the Bitcoin market by considering it a refuge for the global economic context.
Just yesterday the stock market was stained red as a result of the tensions in the United States; meanwhile Bitcoin and its investors were very calm when crypto held on to USD 13,000.
Clearly, situations like yesterday’s have improved the perception that investors, and even Wall Street, have of the leading crypto.
So we have investors eager to enter Bitcoin’s paradise and that results in network congestion that leads to rate increases.
Bitcoin Mining information that shined this week
End of the rainy season in China
Another fundamental explanation for this is the end of the rainy season in China.
Let’s remember that China’s summer rainy season usually lasts from June to October; this provides an excess of resources for hydropower plants and, consequently, electricity prices are cheaper and attractive to Bitcoin miners.
However, once the season is over and prices return to their levels, Bitcoin miners switch off their machines and look for other sources of electricity that are cheaper.
Among other things, such a situation may cause some miners to access energy sources that are not so stable that they cause the frequency of mined blocks to decrease until the hardship adjustment occurs.
An interesting fact is that, according to BitInfoCharts data, the time per block of Bitcoin has increased since October 17; it currently takes about 13 minutes per block.
In fact, the difficulty setting is expected to occur by the end of this week and, with it, the network congestion will be lightened.