Bitcoin fees jump to $ 70

On the one hand, the load on the network has increased due to the increased interest of institutional investors in Bitcoin, and on the other hand,another, its capacity collapsed due to an accident at a mine in the Chinese province of Xinjiang and subsequent pressure from miners. These factors have led to the renewal of the historical high of the transaction value.

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Average commissions hit $ 70 this week, while the previous high of $ 62 was recorded in December 2017, coinciding with a record rise in Bitcoin to $ 20,000.

 Image Source: StormGain Cryptocurrency Exchange

High commission reduces the activity of traders bycryptocurrency exchanges and prevents the use of cryptocurrency as a means of payment. But this factor alone is unlikely to provoke a strong correction, as Bitcoin is seen as an investment asset and an alternative to gold. A more speculative approach was observed in 2017 - along with the rise in price, the inflow of the coin to crypto-exchanges for exchange for stablecoins increased. In the last year, investors, on the other hand, have been withdrawing Bitcoin to cold wallets after purchasing it.

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Another thing is the attitude of financial regulators toturnover and mining of cryptocurrency. According to optimistic forecasts, China may already this year officially present the digital yuan, which is now undergoing state tests. On the one hand, the new currency will help reduce the impact of the Ant Group (Alipay) and Tencent (WeChat) duopoly on digital payments; on the other hand, it will increase government control over financial flows.

Decentralized cryptocurrencies are directcompetitor to the digital yuan, so their spread must be stopped. To do this, the authorities block bank accounts for miners and conduct massive checks. The latest episode is related to a power outage in Xinjiang province due to an explosion at a coal mine. Xinjiang is known for its mining centers, and the accident that occurred caused additional congestion in the power grid. Now law enforcement agencies have begun to search for illegal energy consumers. For at least a week, miners will experience problems with the supply of electricity, due to which the hashrate of the Bitcoin network has collapsed by 30%.

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If the network power does not return to levelsthe previous week, then in about 14 days (2016 blocks) the computational complexity of mining will decrease. Until then, network fees will remain at aggressively high levels.

Analytical group StormGain