Bitcoin Transaction Cost Plummets After Every 4 Years, Is there A Reason?
July 19 2022 - 8:00AM
NEWSBTC
Bitcoin emerged in 2009, making it a total of 13 years of
operations. In all these years, experts have identified interesting
patterns from watching its movement closely. Observers suggest that
two factors usually evoke these patterns on the network, market
conditions and investor sentiment. A change in either of these
factors causes many events to unfold in the ecosystem. The recent
observation by these experts points towards a transaction cost
reduction every four years. For example, the cost for one Bitcoin
transaction was reduced to $56.846 on Thursday, July 14. This
reduction indicates a four-year cycle of cost reduction on the
network. Related Reading | TA: Ethereum Outpaces Bitcoin, Why
ETH Could Rise To $1,500 Initially, the cost of BTC transactions
was usually unpredictable because it is derived using the number of
transactions to divide the miner’s revenue. But now, the recent
Blockchain.com data seem to have proven a more satisfying pattern
for crypto enthusiasts. Bitcoin Data Shows A Predictive Pattern
According to available data on cost movement, July 2022 saw a drop
in transaction cost by more than 81%. This percentage was derived
using May 2021 high transaction costs of $300.331. The factors
leading to such a spike in transaction costs was the reduction in
on-chain transaction and a prolonged bear market. Then, many crypto
investors struggled to operate amid regulatory challenges
permeating the industry. But now, it is clear that the upward and
downward trend in transactions occurs every four years. Data
revealed that this pattern first emerged in 2014, then the next one
occurred in 2018, and now another one in 2022, showing a 4-year
cycle. Based on these data, experts predict that by 2026, another
cycle will occur and might cause a fall to $50. On the flip side,
miners are losing revenue, which has worsened since 2022. According
to reports, July 2022 has been the worst miners have seen in 2
years. Market Crash Affects Miner’s Revenue It’s not surprising
that miners recorded a loss in revenue in July 2022. The crypto
market hasn’t performed very well since the announcement of a rate
increase, activation of the rise, and the crash of the Terra
network. Related Reading | Liquidations Cross $230 Million As
Ethereum Barrels Past $1,400 These events have contributed terribly
to the falling market prices. As a result, miners now spend more on
operating costs in Bitcoin mining. Thankfully, the market saw a
fall in GPU prices, providing a ray of hope for miners. By that,
miners can get hardware at affordable prices, reducing operational
costs. The price at which miners buy their hardware fell by 15%.
This is because many card manufacturers started operations again
after closing shop for some time due to a chip shortage. Now, the
supply of these graphic cards is higher than its demands causing
many cards to sell below MSRPs to fight cut-throat. Featured image
from pixels, charts from TradingView.com
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