Bitcoin Transaction Fees Surge Amid Memecoin Trading Frenzy

Bitcoin Transaction Fees Surge Amid Memecoin Trading Frenzy

Bitcoin transaction fees have surged to their highest level in two years, hitting $3.5 million on May 3rd. This represents a 400% increase from late April, with the average transaction fee reaching $7.2. While this increase is partly attributed to a surge in Bitcoin activity involving BRC-20 transactions, it is primarily caused by the ongoing trading frenzy of memecoins like Pepe Coin (PEPE).

BRC-20 Token Standard Driving the Trend

BRC-20 is an experimental token standard that allows users to issue and transfer fungible tokens on the Bitcoin blockchain. It was introduced in March 2023 by a pseudonymous on-chain analyst known as Domo. The standard has become a major trend in the cryptocurrency industry, specifically amid the sharp growth of the PEPE memecoin, which has rallied more than 600% over the past seven days, reaching its all-time high of $0.00000216 on May 5.

Impact on Ethereum Blockchain

The Bitcoin blockchain is not the only blockchain affected by the ongoing memecoin hype. Gas fees on the Ethereum blockchain have also been skyrocketing to new multi-month highs recently, hitting more than $19 million on May 2nd. This represents a level not seen since May 2022 and makes the Ethereum blockchain the most expensive network in terms of transaction fees at the time of writing.

Despite the recent increase, the current BTC transaction cost is still far from all-time high levels. The highest Bitcoin transaction fees were recorded in April 2021, when the average BTC transaction cost almost reached $70 amid a major decline in the Bitcoin network hash rate. The previous highest point in BTC transaction fees was in 2017, with transaction costs surging above $60.

Ethereum

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