Bitcoin: Fees Exceed $100

Bitcoin (BTC) transaction fees have surpassed $100 for the first time in history, sparking concerns of a potential sell-off among investors. This event occurred on April 20, immediately after the halving, and as transaction costs rise, most investors find themselves in a situation where they hold too little cryptocurrency or are unable to withdraw them from exchanges.

According to data gathered from mempool.space, the average Bitcoin transaction fees were $105.69 over the past 24 hours. In the same timeframe, users were paying an average of 166,150 satoshis or 0.00166150 BTC per transaction.

Additionally, the last four Bitcoin blocks were mined with fees exceeding 1,072 satoshis per virtual byte (vB), translating to $100 for small Segwit transactions. This marks a significant increase compared to the previous transaction fee record of $62.78, reached exactly three years ago.

The sell-off threat resulting from high Bitcoin fees mainly affects users, investors, and traders who are now paying over $100 for each transaction. Negative consequences include holding insufficient balances, inability to withdraw from exchanges, and decreasing profits for Bitcoin's decentralized finance (DeFi) ecosystem.

According to data from BitInfoCharts, over half of all Bitcoin addresses hold something below 0.001 BTC, which at current prices means most of these balances are practically worthless with transaction fees exceeding $100.

Many people keep their cryptocurrencies on centralized exchanges, but high withdrawal fees may motivate them to sell for fiat currencies or other cryptocurrencies. The increase in Bitcoin fees stems from higher demand for limited space on the Bitcoin blockchain. The more congested and desired the Bitcoin network is, the higher fees can be.

Faced with unusually high Bitcoin transaction fees, the market waits to see if demand for block space will decrease, potentially lowering the average transaction fee to a more acceptable level.