HOME CATEGORIES WRITE AND EARN 🔍
CATEGORIES WRITE AND EARN MORE

CRYPTO NEWS

Your favorite crypto news blog

Bitcoin Exchange Activity Now Accounts for 20% of All Miner Fees

Mining 2020/09/09 04:00 by Cole Petersen

Centralized exchanges are playing a decreasingly important role within Bitcoin network activity, which is highlighted by the number of fees that stem from transactions taking place on exchanges.

In past years, exchanges accounted for a far higher percentage of the transaction fees received by miners than presently.

This seems to indicate that although exchanges still play a major role within the ecosystem, users are beginning to transact with BTC at a far higher pace outside of these centralized venues.

This is a positive development, as it suggests that the network is seeing growing utility beyond just being a speculative instrument used by traders and investors.

New Market Participants Flock to Bitcoin

As NewsBTC reported yesterday, the number of users transacting with Bitcoin is on the rise, which is indicated by the massive inflows of capital seen by the benchmark cryptocurrency in recent weeks.

Per data cited within the report, transaction volume on top-tier exchanges shows that the amount of investors and capital entering the crypto market has been on the up and up in recent weeks.

In August, trading volume on exchanges increased by nearly 60% from where they were just one month prior.

“In August, Top-Tier volumes increased 58.3% to $529bn while Lower-Tier volumes increased 30.2% to $291bn. Top-Tier exchanges now represent 64% of total volume (vs 60% in July.)”

Bitcoin

Image Courtesy of CryptoCompare.

This growth in volume likely stems in part from investors looking to increase their exposure to BTC due to its recent strength. It may also point to the number of new investors entering the market – which is shown by the growing number of unique BTC wallet addresses.

Fee Dominance Shows that BTC Network Activity is Shifting Away from Exchanges

Per recent data from Glassnode, it appears that Bitcoin’s on-chain network activity is beginning to migrate away from centralized exchanges.

“On-chain Exchange Fee Dominance shows the major role that centralized exchanges play in the Bitcoin ecosystem. 20% of all miner fees are currently used for BTC txs involving exchange activity. In 2018 after BTC peaked, this number was as high as 41%.”

Image Courtesy of Glassnode.

Because exchanges’ Bitcoin fee dominance remains historically low despite the inflows of new investors, it appears that the market may have significantly further room to grow in the near-term.

This data also elucidates underlying strength for the Bitcoin network, as users are now transacting heavily outside of exchanges.

Featured image from Unsplash.

0 Like(s)



You should also read...

Altcoins 09/05/20 19:47 by Olivia Brooke
This analyst believes exchanges will spearhead the next bearish Bitcoin tide, but CZ strongly vouches for Binance
The majority of Bitcoin proponents have remained bullish as they go all-in on the oldest and most valued cryptocurrency the world has ever known. With whales betting big on Bitcoin, buying pressure h...
Read More
Altcoins 13/05/20 14:29 by Brenda Ngari
Why Traders Shift From Ethereum And Bitcoin Networks In Droves To XRP
According to recent research conducted by Ripple, traders swap bitcoin (BTC) and ethereum (ETH) for XRP for their exchange balance transfers. Xpring’s data scientist Shae Wang noted that the recent...
Read More
Mining 03/09/20 16:40 by Bernice Nyambura
Miners Are Moving Unusually Large Amounts Of BTC – What This Means For Bitcoin Price
A high number of Mining pools are moving BTC from pool wallets to exchanges, according to on-chain data analysis platform CryptoQuant. CryptoQuant, which tracks Bitcoin Miner Flows data shows that...
Read More
Bitcoin 10/09/20 04:00 by Cole Petersen
The Number of Bitcoin “Wholecoiners” Just Hit a Fresh All-Time High
Bitcoin investors have been accumulating the digital asset at a rapid pace throughout the past several days and weeks, with the cryptocurrency seeing massive inflows of capital in August while its pri...
Read More
Bitcoin 11/09/20 04:00 by Cole Petersen
Bitcoin Transaction Data Points to Potential Surge in OTC Trading
Bitcoin transaction volume is rapidly moving off of exchanges, which is a positive sign that indicates the market is beginning to mature as it becomes driven less by speculative trading and more by l...
Read More