The average Bitcoin transaction fee surged by a staggering 937.7% from $0.74 to $7.679 per transaction on August 22, driven by a significant increase in network demand.
Since July, Bitcoin transaction fees had remained relatively stable, typically staying below the $2 mark. On August 18, the fees even reached historic lows of $0.558. While these lower fees make it more affordable for the general public to transfer Bitcoin, they also negatively impact miner revenue.
The Bitcoin network imposes a fee on every BTC transfer to compensate miners for authenticating transactions. However, the demand for network bandwidth directly influences the fees required to send or receive BTC.
According to data from Blockchain.com and YCharts, the sharp rise in Bitcoin transaction fees on August 22 added pressure on investors. Many in the crypto community faced excessive fees as a result. The pseudonymous Bitcoin developer Mononaut highlighted a striking example: during a period of peak demand, a user had to pay 0.5 BTC in fees to consolidate just 0.55 BTC.
As of August 23, mempool data indicates that average Bitcoin transaction fees have moderated, dropping to $0.34.
A recent report from data analytics firm CryptoQuant revealed that Bitcoin demand has declined, with growth dropping from a 30-day increase of 496,000 BTC in April to a current negative growth of 25,000 BTC. The slowdown in demand is attributed to a decline in purchases by spot BTC exchange-traded funds in the United States, which fell from 12,000 BTC in March to an average of 1,300 BTC between August 11 and 17.
Investment firm VanEck, however, suggests that Bitcoin miners could generate approximately $13.9 billion in additional yearly revenue by 2027 if they partially transition to providing energy to the artificial intelligence and high-performance computing sectors.
