Memecoin hype drives Bitcoin transaction fees to multi-year highs
Bitcoin transaction fees rose in early May, reaching their highest point in the past two years, according to data from Crypto Fees.
On May 3, the total amount paid on the Bitcoin blockchain reached an amount of $3.5 million, jumping around 400% from the end of April. The average Bitcoin transaction fee reached as much as $7.2, according to YCharts.
The ongoing trading frenzy in memecoins such as Pepe Coin (PEPE) has triggered an unintended consequence for Bitcoin (BTC), driving transaction costs to multi-year highs.
The recent increase in BTC transaction fees is largely attributed to an increase in Bitcoin activity involving BRC-20 transactions. According to data from Galaxy Research, 50% of all Bitcoin transactions were on May 2 related to BRC-20 transactions.
Modeled after Ethereum’s ERC-20 token standard, BRC-20 is an experimental token standard that allows users to issue and transfer fungible tokens on the Bitcoin blockchain. The standard was introduced in March 2023 by a pseudonymous chain analyst known as Domo.
The BRC-20 token standard has quickly become a major trend in the cryptocurrency industry, especially amid the explosive growth of the PEPE memecoin. The token has risen more than 600% in the past seven days, reaching its all-time high of $0.00000216 on May 5.
The Bitcoin blockchain is not the only blockchain affected by the ongoing memecoin hype. Gas fees on the Ethereum blockchain have also skyrocketed to new multi-month highs recently.
On May 2, ETH transaction fees reached a total of more than $19 million, a level not seen since May 2022, according to CryptoFees. The Ethereum blockchain remains the most expensive network in terms of transaction fees at the time of writing.
Related: Bitcoin Miners Earned $50B From BTC Block Rewards, Fees Since 2010
Despite the recent increase in Bitcoin transaction fees, current BTC transaction costs are still far from all-time highs. The highest Bitcoin transaction fees ever seen were recorded in April 2021, when the average BTC transaction cost nearly reached $70 amid a sharp decline in the Bitcoin network’s hash rate. The previous high point in BTC transaction fees was in 2017, with transaction costs rising above $60.
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