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Bitcoin transaction fees hit a new high in 2021

  • October 06 2021
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Bitcoin transaction fees hit a new high in 2021

By Fergus Halliday
October 06 2021

The revenues generated by cryptocurrency transactions are beginning to rival those of e-commerce giants.

Bitcoin transaction fees hit a new high in 2021

Bitcoin transaction fees hit a new high in 2021

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  • October 06 2021
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The revenues generated by cryptocurrency transactions are beginning to rival those of e-commerce giants.

Bitcoin transaction fees hit a new high in 2021

The rising popularity of cryptocurrencies like bitcoin is driving huge growth when it comes to the revenue generated by the transaction fees they levy on users.

According to new research published by Wette.de, transaction fees generated by the bitcoin network grew to a total of $416.6 million in the second quarter of 2021. Relative to the $48.5 million recorded during the same period of 2020, this figure represents a 750 per cent increase.

“Due to increasing adoption worldwide, cryptocurrencies are generating higher income from transaction fees than major mainstream companies,” the report said.

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According to Wette.de, the annualised revenue run rates (ARR) for bitcoin transactions rose to highs of $2.986 in April. This puts the world’s most popular blockchain ahead of major companies like Shopify when it comes to ARR.

Ethereum, the second-most popular cryptocurrency, experienced a similar spike in transaction fee revenues over the period.

In the second quarter of 2020, ethereum’s transaction fee volume totalled $36.7 billion. In the second quarter of 2021, this rose by 2,000 per cent to $777.1 billion.

Wette.de indicated that the key driver here was the increased adoption and popularity of cryptocurrencies. They cited data released by Chasinalysis which suggested that cryptocurrency adoption has grown by 881 per cent over the past year.

However, the demographics making up these new entrants in the space is bringing some new diversity to the space. According to one report released by BTC Markets earlier this year, Baby Boomers and women are entering the cryptocurrency space at an accelerated pace.

According to BTC Markets CEO Caroline Bowler, the growing number of Baby Boomers looking to enter the crypto space is usually at a time in their lives when they have accumulated significant wealth and assets and have many years of experience investing.

“They are not worried about allocating a small percentage of their portfolios to cryptocurrencies,” Ms Bowler said.

Unfortunately, the highs of the second quarter of 2021 that boosted transaction volumes and encouraged new investment into the crypto space were followed by significant setbacks.

Wette.de noted that bitcoin transaction fee volume fell by 93 per cent in May, while trading volume halved during the period.

The report suggested that highly publicised crackdowns by the Chinese government during this period were partially to blame, adding that the region fell from fourth to 13th place when it came to the adoption of digital assets.

“After hitting an all-time high of nearly $65,000 in April, BTC closed the quarter at around $35,000,” Wette.de said.

Bitcoin transaction fees hit a new high in 2021
Bitcoin transaction fees hit a new high in 2021
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About the author

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Fergus is a journalist for Momentum Media's nestegg and Smart Property Investment. He likes to write about money, markets, how innovation is changing the financial landscape and how younger consumers can achieve their goals in unpredictable times. 

About the author

author image
Fergus Halliday

Fergus is a journalist for Momentum Media's nestegg and Smart Property Investment. He likes to write about money, markets, how innovation is changing the financial landscape and how younger consumers can achieve their goals in unpredictable times. 

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