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Bitcoin and Ethereum slow down as transaction values and fees plunge 70%


04 Mar 2021

#Bitcoin

On-chain metrics for both cryptocurrencies show a marked decrease in the dollar value of transactions and the subsequent transaction fees. Bitcoin (BTC) and Ether (ETH) appear to be experiencing something of a slowdown, as on-chain data shows a dramatic decrease in the U.S dollar value of coins being sent across both blockchains in the past week. At the same time, transaction fees for both chains have receded from recent highs, or in Ethereum’s case, an all-time high.

Data from Bitinfocharts shows $46.68 billion worth of BTC was sent across the Bitcoin blockchain on Feb. 25. For some context, that’s around 5% of the total Bitcoin market cap, which stands at $925 billion at time of writing.

By three days later, on Feb. 28, the U.S. dollar value of Bitcoin being sent had fallen to $15.38 billion — a 66% drop off. At the same time, the average transaction fee for Bitcoin users fell by 53% — from $31.47 to $14.63. For context, the highest average fees ever recorded for Bitcoin came in December 2017 when BTC fees exceeded $55, marking the end of the coin’s bull run for that period.

Over on Ethereum, the slowdown was equally pronounced. In the four days between Feb. 23–27, the total value of coins sent across the Ethereum blockchain fell 65%  from $11.1 billion to $3.84 billion.

Meanwhile, average Ethereum transaction fees, which had soared to an all-time high of $38.21 by Feb. 23, dropped 70% down to $11.21.

The average fee statistic can often be misleading, as it is heavily weighted by the mass of large transactions that incur super-high fees. The typical Ethereum user may be more interested in the median transaction fee value, which also fell 72% down to $5.23. For context, the recommended fee for making a “rapid” Ethereum transaction is currently around $2.80 according to GasNow.org.

Such a sizable slowdown in activity on both blockchains could be interpreted by some as a sign that the current bull run is grinding to a halt. Yet a glance at the recent history of both chains shows that such pullbacks are not uncommon.

In January, the dollar value of Bitcoin transactions fell 72% over a two-week period, before picking back up again to soar even higher in February. Likewise, the average Bitcoin transaction fee dropped 58% in the same time period. The same general pattern was observed on Ethereum.

With this in mind, it is in all likelihood too early to assume that the current slowdown is indicative of the end of the crypto bull run, at least based on these metrics alone. Indeed, in the seven days since these metrics bottomed out, they have since begun to rise once more, as the ebb and flow of the cryptocurrency market continues.


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Top Cryptocurrencies with Price Predictions

# Crypto Prediction Accuracy CVIX Price 24h 7d Market Cap 7d price change
1 Bitcoin (BTC) BTC Bitcoin predictions 65.6% 75 $30 127.85 -3.00% -1.46% $573 691 120 758 BTC 7 days price change
2 Ethereum (ETH) ETH Ethereum predictions 61.6% 77 $2 045.64 -3.49% -9.90% $247 127 888 676 ETH 7 days price change
3 Tether (USDT) USDT Tether predictions 96% 1 $0.998905 -0.01% -0.10% $75 669 201 846 USDT 7 days price change
4 USD Coin (USDC) USDC USD Coin predictions 96% 1 $1.000390 0.04% 0.05% $52 067 570 451 USDC 7 days price change
5 Binance Coin (BNB) BNB Binance Coin predictions 64% 71 $301.61 -1.74% 0.09% $49 245 541 999 BNB 7 days price change
6 XRP (XRP) XRP XRP predictions 65.2% 70 $0.430207 -2.88% -13.13% $20 797 523 991 XRP 7 days price change
7 Cardano (ADA) ADA Cardano predictions 68.4% 68 $0.564719 -5.93% -8.41% $19 053 066 566 ADA 7 days price change
8 Solana (SOL) SOL Solana predictions 64% 80 $54.87 -3.76% -14.19% $18 504 202 384 SOL 7 days price change
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10 Dogecoin (DOGE) DOGE Dogecoin predictions 61.6% 75 $0.089226 -2.37% -15.15% $11 837 628 956 DOGE 7 days price change
11 Polkadot (DOT) DOT Polkadot predictions 60.4% 77 $10.85 -5.25% -0.79% $10 719 658 670 DOT 7 days price change
12 Avalanche (AVAX) AVAX Avalanche predictions 64% 79 $33.45 -4.80% -20.93% $9 001 419 724 AVAX 7 days price change
13 Wrapped Bitcoin (WBTC) WBTC Wrapped Bitcoin predictions 63.6% 75 $30 106.86 -3.05% -1.48% $8 550 465 811 WBTC 7 days price change
14 TRON (TRX) TRX TRON predictions 68.4% 61 $0.069877 -1.90% -8.63% $6 831 881 782 TRX 7 days price change
15 SHIBA INU (SHIB) SHIB SHIBA INU predictions 64% 78 $0.000012 -3.50% -14.12% $6 733 612 508 SHIB 7 days price change

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