Bitcoin and Ethereum users who need to transfer their funds can benefit from low fees in both ecosystems. On June 23, the average Bitcoin (BTC) transaction fee reached a low of $1.93, the lowest in eight months. Meanwhile, the average Ethereum fees on June 22 were $0.70, a substantial decrease from the highs of $2.50 seen in March.
Vitali Dervoed, CEO and co-founder of the onchain decentralized exchange Spark, stated that the drop in fees was not unexpected. He explained that the halving often leads to a temporary decrease in mining activity as miners adjust to lower profitability, leading to a reduction in competition for block space and subsequently lowering fees.
Justin d’Anethan, head of business development APAC at crypto market maker Keyrock, also mentioned that factors such as massive transaction spikes due to Ordinals and Runes inscriptions contributed to the decrease in fees. He noted that the hype surrounding these factors has slowed down, leading to the decline in fees.
Carlos Mercado, data scientist at blockchain data firm Flipside Crypto, identified Ordinals as a contributing factor to the short-term spikes in BTC activity and fees following the halving. However, he highlighted that these narratives come and go, resulting in fluctuations in fees.
Despite the benefits for users, the decrease in fees is less favorable for Bitcoin miners. Mercado pointed out that BTC fees were making up for lost block rewards, and the drop in fees has impacted miners’ revenue. D’Anethan also noted that miners may be selling BTC to offset lower gains and cover expenses.
On the other hand, Ethereum’s low fees are attributed to the Dencun update in March and the increasing adoption of L2 solutions such as Optimistic and zero-knowledge rollups. Dervoed emphasized that Ethereum’s fee decline is primarily due to the adoption of L2 solutions, which is enhancing the network’s capacity and efficiency without compromising security.
The sustainability of the low-fee environment is a matter of perspective. Dervoed sees low fees as a bullish signal for the ecosystems, marking significant progress in Ethereum’s roadmap toward scalability. However, Mercado has a more bearish interpretation, expressing concerns about the long-term implications of low fees on both Bitcoin and Ethereum.
In conclusion, the decrease in fees is a complex issue that has both positive and negative implications for Bitcoin and Ethereum, affecting users, miners, and the overall sustainability of the ecosystems.