Benzinga - by Bibhu Pattnaik, Benzinga Staff Writer.
Bitcoin (CRYPTO: BTC) transaction fees have significantly decreased, reaching a five-year low, according to CryptoQuant analyst Julio Moreno.
The drop comes after increased fees following the Bitcoin halving event and the launch of the Runes token standard, which initially caused a surge in transaction costs.
Despite the Runes' substantial activity on April 20, which saw a trader paying over $500,000 in fees for a single transaction, the average fees have plummeted.
On Sunday, Moreno highlighted on X that the current average daily transaction fee on the Bitcoin network is lower than in late 2017 and early 2018, marking a notable shift.
Average #Bitcoin transaction fees coming down significantly.This helps put fees into perspective.
Even with all the Runes activity yesterday, the daily average transaction fee was lower than in late 2017, early 2018. pic.twitter.com/BEtO9aRWCJ
— Julio Moreno (@jjcmoreno) April 21, 2024
Also Read: If You Invested $1,000 In Bitcoin During The May 2020 Bitcoin Halving, Here's How Much You'd Have Now
Reducing transaction fees is a crucial development for Bitcoin, especially after the halving, which reduced the block reward for miners.
The high volume of transactions brought by Runes had been seen as a way to compensate miners with higher fees. Still, the recent drop in fees poses new questions about the sustainability of mining revenues.
In contrast to Ethereum (CRYPTO: ETH), which has made significant upgrades to its network to reduce transaction fees, such as the recent Dencun upgrade, Bitcoin has no immediate plans to implement changes aimed at lowering fees.
Ethereum's upgrade significantly reduced Layer-2 protocol fees, positioning it differently from Bitcoin, where high fees can deter users from transacting.
This situation underscores a unique moment for Bitcoin, as it navigates the aftermath of its halving event and the fluctuating impact of the Runes standard on its transaction fees.
Now Read: Latest Bitcoin Halving Could Cost Miners Billions Of Dollars In Revenue: Report
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