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August 23, 2022

Bitcoin Transaction Fees Hit 2-Year Low

August 23, 2022

Bitcoin transaction fees have fallen under a dollar for the first time in two years thanks to network upgrades, falling bitcoin prices, and a drop in mining difficulty.

The average Bitcoin transaction fee is now under $1.00 for the first time in over two years, making now an ideal time to pick up the world’s largest cryptocurrency without getting saddled with extra fees.

While the Bitcoin network has struggled with high fees at times thanks to its proof of work consensus mechanism, upgrades such as the Lightning Network have made it possible to send bitcoin at a fraction of a cent. 

On Tuesday, the average Bitcoin transaction fee fell to $0.825, a number not seen since June 13th, 2020.

Graph showing Average Bitcoin transaction fees in USD per transaction.

Average Bitcoin transaction fees in USD per transaction. (Source: Blockchain.com)

Are falling prices to blame?

The drop in transaction fees can be partly attributed to falling bitcoin prices lowering the incentive for miners and reducing the mining difficulty. However other factors are clearly at play, as mining difficulty remains high compared to earlier this year.

Bitcoin network difficulty from October 2021 until July 2022

Bitcoin network difficulty over the past year. (Source: Blockchain.com)

One factor that may be responsible for the fluctuation in mining difficulty is access to the hardware needed to mine bitcoin. 

The chips used to mine bitcoin have recently started becoming available again after a prolonged shortage, which has seen mining difficulty start to recover after a prolonged fall over the summer. 

Photo of a Bitcoin mining farm


Time to buy?

Whatever the reason for the low transaction fees at present, one thing is certain. No one likes paying high transaction fees. 

So if you’ve made the decision to buy bitcoin but you’re unsure when to push the “buy” button, when transaction fees are at their lowest is, without doubt, an opportune moment!

As always, this article does not constitute financial advice and you should be sure to do your own research and consult a professional financial advisor before making any investment decision.

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