LONDON - The cryptocurrency market has been experiencing significant activity with both Bitcoin and Ethereum reaching yearly highs, causing a substantial increase in transaction fees. A recent market rally pushed Bitcoin to its annual peak price of $45,000 on December 5th before it stabilized above $43,000. Following this surge, IntoTheBlock reported on December 8th that Bitcoin's on-chain activity had spiked, leading to a more than 60% increase in transaction fees.
Ethereum has also seen remarkable growth, setting new yearly highs on Friday by reaching $2,390. This latest milestone came with daily gains that surpassed Bitcoin's incremental rise. Despite Ethereum's success in price and an increase in whale dominance—with these large holders now owning 35% of the total supply—there has not been a corresponding surge in new user acquisition for the network.
The rise in transaction fees for Bitcoin outpaced that of Ethereum's, which saw nearly a 50% fee growth. This fee inflation typically indicates a heightened demand for processing transactions on each blockchain, often reflecting increased investor interest and market activity.
As both cryptocurrencies showcase robust performance, the market is closely watching these developments. The spike in fees particularly underscores the growing costs associated with the surging demand for blockchain space during market rallies. Investors and users are now navigating a landscape where heightened activity can lead to higher costs for transaction processing on these networks.
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