Bitcoin fees have now risen to their highest level since February 2018 during the very peak of prices.
For the first time since, they have now reached on average $6.62 per transaction with about 90MB of data waiting to move.
The weekly average has also risen above $5 for the first time since the peak of prices, with a general trend of rising fees observable since April 2020.
That indicates demand for the bitcoin network is increasing, but there has also been a significant fall in bitcoin’s hashrate.
Bitcoin’s hashrate has dropped from 120 petahashes to 95 following the halvening earlier this month.
That makes it the biggest drop so far, which means it is more difficult to find blocks than usual, thus effectively capacity has decreased as blocks are coming in every circa 12.9 minutes instead of every ten minutes.
A difficulty readjustment is expected on June the 4th, so the congestion may continue for some time unless the hashrate increases again.
It’s not very clear why it has fallen, with one reason potentially being that currently it is 6% more profitable to mine on BCH.
BCH had its halvening first which led to a significant fall in hash as miners moved to BTC, but BCH’s entire hashrate is only about 2.3% of bitcoin’s, so it’s unlikely to fully explain this significant drop.
The reason thus is more bitcoin’s halvening itself which reduced miners’ income by 50%, so presumably leading to some of them turning off their asics with a new balance now to be found.
Once it does, capacity should effectively increase and thus fees should reduce again, unless demand for the bitcoin network continues to rise.