Data presented by cryptocurrency trading simulator Crypto Parrot indicates Bitcoin's fees per transaction have grown at least twentyfold between February 2020 and February 2021 on a 30-day average.
In February 2020, the fee was 60 cents. By Feb 8. 2021, the fee was at $12.46, representing a growth of 1,976.66%. On a year-to-date basis, the fee has grown by 81.1%.
The increase in the Bitcoin transaction fee correlates with the asset's recent surge in value. The report explores the drivers behind the rise in transaction fees.
"The surge in the asset's value resulted in most people buying Bitcoin in a bid not to miss out on the rally,” according to the report. “When prices surge, more potential investors show interest in buying Bitcoin, since the fear of missing out (FOMO) usually sets in. In this case, the Bitcoin blockchain often gets congested, as miners compete to process the transactions, leading to a skyrocketing of fees."
The transaction fees' growth also reflects on the Bitcoin network's total hash rate on a 30-day average. The analysis shows that the hash rate has grown from 109.7 million TH/s as of February 2020 to 151.7 million TH/s, representing a growth of 38.28% over the last 12 months. The hash rate has grown by 11.38% year-to-date.
The hash rate is the processing power of the Bitcoin network or the speed at which miners are able to perform proof-of-work calculations per second. Typically, the higher the hash rate, the more miners are participating in the network. As a result, more blocks are being mined, reflecting the asset’s increasing price.