{"id":7380,"date":"2023-05-09T11:39:01","date_gmt":"2023-05-09T11:39:01","guid":{"rendered":"https:\/\/newmoneyreview.com\/?p=7380"},"modified":"2023-09-25T14:21:33","modified_gmt":"2023-09-25T14:21:33","slug":"bitcoin-clogs-up-as-retail-gambling-surges","status":"publish","type":"post","link":"https:\/\/newmoneyreview.com\/index.php\/2023\/05\/09\/bitcoin-clogs-up-as-retail-gambling-surges\/","title":{"rendered":"Bitcoin clogs up as retail gambling surges"},"content":{"rendered":"<p>Transaction fees on the bitcoin network have surged after a new spike in retail speculation in cryptocurrencies.<\/p>\n<p>Having traded in a $2-4 range for the last year, in recent days the average fee to process a bitcoin transaction has jumped to over $30.<\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"alignnone size-full wp-image-7382\" src=\"https:\/\/newmoneyreview.com\/wp-content\/uploads\/2023\/05\/fees-usd-per-transaction.png\" alt=\"\" width=\"1200\" height=\"600\" srcset=\"https:\/\/newmoneyreview.com\/wp-content\/uploads\/2023\/05\/fees-usd-per-transaction.png 1200w, https:\/\/newmoneyreview.com\/wp-content\/uploads\/2023\/05\/fees-usd-per-transaction-300x150.png 300w, https:\/\/newmoneyreview.com\/wp-content\/uploads\/2023\/05\/fees-usd-per-transaction-1024x512.png 1024w, https:\/\/newmoneyreview.com\/wp-content\/uploads\/2023\/05\/fees-usd-per-transaction-768x384.png 768w, https:\/\/newmoneyreview.com\/wp-content\/uploads\/2023\/05\/fees-usd-per-transaction-1000x500.png 1000w\" sizes=\"auto, (max-width: 1200px) 100vw, 1200px\" \/><\/p>\n<p>Transaction fees have risen to this level twice before, in December 2017 and April 2021, on both occasions near a temporary top for bitcoin prices.<\/p>\n<p>Bitcoin traded near $27,500 per coin at midday London time on 9 May, down from an interim peak of $31,050 reached in mid-April.<\/p>\n<p><a href=\"https:\/\/newmoneyreview.com\/index.php\/2019\/01\/24\/can-bitcoin-live-on-fees-alone\/\">Together with the so-called block subsidy<\/a>, transaction fees are the incentive for bitcoin miners (those keeping an electronic record of past transaction data) to spend money on the equipment and electricity needed to participate in the cryptocurrency network.<\/p>\n<blockquote><p>a surge of interest in so-called \u2018memecoins\u2019 is responsible for the bitcoin network congestion<\/p><\/blockquote>\n<p>There are currently around 500,000 bitcoin transactions per day, meaning that transaction fees are generating about $15m daily for miners.<\/p>\n<p>As around 900 new bitcoins (worth around $25m) <a href=\"https:\/\/newmoneyreview.com\/index.php\/2018\/04\/06\/what-powers-bitcoin\/\">are minted per day in the form of a block subsidy<\/a>, this means transaction fees are close to generating half bitcoin miners\u2019 overall revenue.<\/p>\n<p>The latest spike in bitcoin transaction fees has been driven by a new bout of retail speculation in cryptocurrency.<\/p>\n<p><a href=\"https:\/\/www.bloomberg.com\/news\/articles\/2023-05-08\/bitcoin-based-memecoin-surge-seen-driving-latest-binance-anxiety\">According to Bloomberg<\/a>, a surge of interest in so-called \u2018memecoins\u2019 is primarily responsible for the bitcoin network congestion.<\/p>\n<p>Several of these memecoins use bitcoin for the settlement of their transactions, using a new bitcoin-based token standard called \u2018BRC-20\u2019 that was invented in March by an anonymous programmer.<\/p>\n<p>One memecoin, \u2018Pepe\u2019, jumped more than 3,000 percent in price after it was launched in April. Another bitcoin-based memecoin, \u2018Ordi\u2019, was launched this weekend and saw its market value surge to as much as $900 million.<\/p>\n<blockquote><p>\u201cThis is a learning opportunity for us and we\u2019ll do our best to prevent this from happening again\u201d<\/p><\/blockquote>\n<p>Bitcoin\u2019s network congestion has had knock-on effects across the cryptocurrency ecosystem. On Monday Binance, the world\u2019s most active cryptocurrency exchange, <a href=\"https:\/\/twitter.com\/binance\/status\/1655380303383261185\">temporarily stopped clients from withdrawing bitcoin<\/a>, blaming the large volume of unconfirmed transactions on the network.<\/p>\n<p>Three hours later the firm said it was resuming client withdrawals, having hiked its own transaction fees in the interim.<\/p>\n<p>\u201cThis is a learning opportunity for us and we\u2019ll do our best to prevent this from happening again,\u201d Binance said on Twitter.<\/p>\n<p>The latest speculation in cryptocurrency has been mirrored in the technology segment of the US stock market.<\/p>\n<p>After a poor performance in 2022, Meta (owner of Facebook and Instagram) shares are up 87 percent so far this year.<\/p>\n<p>And despite Elon Musk\u2019s apparently disastrous purchase of Twitter, small investors continue to back his judgement\u2014they have pushed Musk\u2019s car company Tesla\u2019s shares up by almost 60 percent.<\/p>\n<p>The continuing exuberance amongst retail traders poses a challenge for the US Federal Reserve, which last week raised its benchmark Fed funds rate to 5.25 percent, the tenth rate hike since March 2022 and the highest level since 2007.<\/p>\n<p>Federal funds futures traded on the CME exchange suggest market participants believe official interest rates have now peaked and will fall to 3 percent by the end of 2024.<\/p>\n<p><strong>More on this topic<\/strong><\/p>\n<p><a href=\"https:\/\/newmoneyreview.com\/index.php\/2021\/02\/18\/bitcoin-transaction-fees-rise-but-are-they-enough\/\">Bitcoin transaction fees rise\u2014but are they enough?\u00a0<\/a><\/p>\n<p><a href=\"https:\/\/newmoneyreview.com\/index.php\/2018\/04\/06\/what-powers-bitcoin\/\">What powers bitcoin<\/a><\/p>\n<p><a href=\"https:\/\/newmoneyreview.com\/index.php\/2021\/12\/10\/ethereum-fees-up-tenfold-in-five-months\/\">Ethereum fees up tenfold in five months<\/a><\/p>\n<p><strong>Listen in<\/strong><\/p>\n<p><em>Expert views on money, finance, politics and technology\u2014<a href=\"https:\/\/blubrry.com\/newmoneyreview\/\">listen to the New Money Review podcast<\/a><\/em><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Transaction fees on the bitcoin network have surged after a new spike in retail speculation in cryptocurrencies. Having traded in a $2-4 range for the last year, in recent days [&hellip;]<\/p>\n","protected":false},"author":3,"featured_media":6096,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_exactmetrics_skip_tracking":false,"_exactmetrics_sitenote_active":false,"_exactmetrics_sitenote_note":"","_exactmetrics_sitenote_category":0,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[1013,1012,1053,1026,1014],"tags":[1034,2212,2213,2211],"class_list":{"0":"post-7380","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-account","8":"category-exchange","9":"category-featured-1","10":"category-latest-slider","11":"category-payment","12":"tag-bitcoin","13":"tag-congestion","14":"tag-pepe","15":"tag-transaction-fee"},"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v24.3 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Bitcoin clogs up as retail gambling surges - 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