Bitcoin transaction fees plummeted 98%, and the market value/transaction cost ratio was lower than Ethereum for the first time

In the digital currency market, Bitcoin has always been one of the most representative cryptocurrencies. As a groundbreaking technology, the emergence of blockchain and Bitcoin marks a major change in the financial field. However, the recent plunge in Bitcoin transaction fees and the fact that its market value and transaction cost ratio is lower than Ethereum for the first time have attracted widespread attention in the market. This change not only affects investor sentiment, but also makes people re-examine the position of Bitcoin in the cryptocurrency ecosystem.

First, the plunge in Bitcoin transaction fees is a striking phenomenon. According to the latest data, Bitcoin transaction fees have plummeted by 98% in the past few months. Behind this change, there is not only the influence of market supply and demand, but also the technological progress of the Bitcoin network. In the past, Bitcoin transactions were expensive, especially when the network was congested, and traders had to pay higher fees to ensure that their transactions were prioritized. However, with the continuous optimization of the Bitcoin network and the increase in transaction confirmation speed, transaction fees have been significantly reduced. Today, users can complete transactions at lower fees, and even achieve almost zero-fee transactions when the network is idle.

Next, we have to mention that Bitcoin's market value and transaction cost ratio is lower than Ethereum's for the first time. This change marks a potential shift in the market landscape. As the second largest cryptocurrency, Ethereum's smart contract functions and decentralized application (DApps) ecosystem have attracted a large number of developers and users. Unlike Bitcoin, which mainly serves as a store of value, Ethereum is more flexible and diverse in function, which has gradually surpassed Bitcoin in some aspects. Although Bitcoin is still the "gold standard" of the market, its disadvantages in transaction costs and market value may affect its future market performance.

It is worth noting that this change is not an isolated incident, but part of the dynamics of the entire cryptocurrency market. As more investors pay attention to Ethereum and its ecosystem, Bitcoin's market share has been hit to a certain extent. Especially in emerging fields such as DeFi (decentralized finance) and NFT (non-fungible tokens), Ethereum has shown strong vitality. Many investors have begun to shift funds from Bitcoin to Ethereum in pursuit of higher returns. This trend of capital flow has further exacerbated the pressure on Bitcoin's market value.

In addition, market psychology also plays a key role in this process. The fluctuation of investor sentiment directly affects the price trend of cryptocurrencies. Against the backdrop of the plummeting transaction fees of Bitcoin, investors may have doubts about the future performance of Bitcoin, which may lead to an increase in selling behavior. On the contrary, the increased attention to Ethereum may attract more capital inflows, forming a virtuous circle. Such market dynamics not only reflect investors' preferences for technology and applications, but also reveal the differences in market confidence in different cryptocurrencies.

When analyzing the market performance of Bitcoin and Ethereum, we also need to take into account the factors of technological progress. The scalability and transaction speed of the Bitcoin network have always been challenges for it. Although Bitcoin has advantages in security and decentralization, its transaction processing speed is relatively slow, resulting in poor user experience. Ethereum, on the other hand, aims to solve these problems through continuous technological upgrades, such as the launch of Ethereum 2.0. The Proof of Stake (PoS) mechanism it adopts not only improves transaction processing efficiency, but also reduces energy consumption, attracting more investors who focus on sustainable development.

In addition, as market participants gradually deepen their understanding of cryptocurrencies, changes in regulatory policies have also had a profound impact on the market. Governments have different attitudes towards cryptocurrencies. Some countries actively promote the development of blockchain technology, while others are cautious about cryptocurrency transactions. This change in the policy environment may have different impacts on the market performance of Bitcoin and Ethereum. As an asset, Bitcoin may face stricter regulation, while Ethereum may receive more policy support due to its diverse application scenarios.

In addition, market competition is also a factor that cannot be ignored. With the emergence of more and more blockchain projects, market competition is becoming increasingly fierce. The emergence of emerging projects often attracts investors' attention and distracts attention from Bitcoin and Ethereum. Especially in the fields of DeFi and NFT, many new projects have rapidly emerged with their unique innovations and application scenarios, bringing challenges to traditional cryptocurrencies. This competitive situation not only prompts Bitcoin and Ethereum to continue technological innovation, but also promotes the healthy development of the entire cryptocurrency market.

In such a market environment, investors need to look at the future of Bitcoin and Ethereum more rationally. Although Bitcoin is still the market leader, its market position is facing challenges. The rise of Ethereum means that investors must consider multiple factors such as technology, application and market trends when choosing investment targets. Only by fully understanding market dynamics can we make more informed investment decisions.

In summary, the sharp drop in Bitcoin transaction fees and the phenomenon that the market value/transaction cost ratio is lower than that of Ethereum for the first time are the manifestations of the diversified development of the digital currency market. This change not only reflects the changes in the supply and demand relationship in the market, but also reveals the impact of technological progress and market psychology on the price of cryptocurrencies. In the future, investors need to pay attention to the dynamic changes in the market and rationally analyze the development trend of digital currencies to seize investment opportunities. Both Bitcoin and Ethereum are important components of the digital economy era. Understanding their changes will open up a broader investment horizon for us.

The four most famous international exchanges:

Binance INTL	OKX INTL	Gate.io INTL	Huobi INTL
China Line　APP DL	China Line　APP DL	China Line　APP DL	China Line　APP DL

Note: The above exchange logo is the official website registration link, and the text is the APP download link.

Coin Circle (120BtC.coM): According to data from TheBlock, as the Runes protocol (Runes) was launched at the same time as the Bitcoin halving, transaction fees on the Bitcoin network have risen accordingly. The 7-day moving average of Bitcoin's average transaction fee exceeds US$40, which is about 10 times that of Ethereum's US$4.10.
At the same time, Bitcoin's total transaction fees also surpassed Ethereum, with its 7-day moving average climbing to US$25.77 million, a record high.
Bitcoin market cap/transaction fee ratio briefly fell below Ethereum
More notably, the recent inversion of Bitcoin and Ethereum’s market cap/transaction fee ratio, which is calculated by dividing the market cap of the blockchain’s native asset by the annualized total fees paid to the network, is somewhat similar to observing a traditional company’s price-to-earnings ratio (P/ERatio), which is calculated by dividing a company’s market cap by its after-tax net profit.
Earlier this month, the moving average of Bitcoin's market capitalization/transaction fee ratio was 2,400, while Ethereum's was only 118.33, but by April 25, Bitcoin's ratio had fallen to 220.77, lower than Ethereum's 227.12. This is the first time since July 2019 that the 7-day moving average of Bitcoin's market capitalization/transaction fee ratio has fallen lower than Ethereum's.
The
Block pointed out that a higher market capitalization/transaction fee ratio may mean that the asset is overvalued, while a lower price-to-earnings ratio can be considered the opposite. Although recent changes do not mean that Bitcoin is undervalued and Ethereum is overvalued, it does reflect the impact of the huge demand brought by the Rune Protocol on the Bitcoin network.
However, the phenomenon of Bitcoin's market value/transaction fee ratio being lower than Ethereum was quite short-lived, as the recent Rune craze has dissipated, causing Bitcoin transaction fees to begin to slow down.
Rune-related Bitcoin transaction fees have plummeted by more than 98%
Data released by Glassnode shows that after the halving, rune-related transactions pushed the Bitcoin network to achieve a total transaction fee income of up to US$117 million. Among them, on the day of the halving, rune-related transactions generated transaction fee income of up to US$62.4 million.
However, as the rune craze subsided, on April 28, rune-related transactions only contributed $1.03 million in transaction fees to the Bitcoin network, a drop of 98.4% from the day of the halving.
According to mempool data, the transaction fee of the Bitcoin network has dropped sharply to 19 sats ($1.53) to 24 sats ($1.93) per byte, in stark contrast to the day of the Bitcoin halving on the 20th, when the transaction fee soared to 1428 sats ($127.59) to 2232 sats (nearly $200) per byte.
Current Bitcoin network fees
Bitcoin network halving day transaction fees
Research Institute Paradigma
Guiriba, a cryptocurrency analyst at Education, recently pointed out that among the more than 20,000 rune tokens currently on the market, only 77 are relatively successful, accounting for less than 0.4%. The lack of money-making effect may be the main reason for the decline of the rune craze.