Bitcoin Transactions Fall By Around Half

Mining bitcoin

Morning Report: Bitcoin transaction volume is falling, but that’s helping lower bitcoin’s transaction costs and draining its backlog.

In late December, bitcoin volume spiked to nearly 400,000 transactions confirmed per day, a number that was nearly double its August lows. According to, daily transaction volume rose from around 210,000 per day in early August to just under 400,000 in the last month of the year.

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Since then, bitcoin’s volume has fallen precipitously, slipping under the 200,000 daily transaction mark in February before recovering to that numerical threshold.

You can see the gyrations here in the confirmed transactions chart (one-year timespan, seven-day average chart):

Why do we care about bitcoin’s short-term momentum changes when things like Robinhood are more exciting? Mostly because by tracking bitcoin’s vitals, we can look under the hood. It’s well and good that so many folks signed up for Robinhood’s crypto project. But when volume is down as far as it is this month, it’s better to know the latter than get caught up in what crypto-excited startups are doing.

Returning to the data, the above image isn’t a very bullish chart, as it indicates that when the price of bitcoin drops—as it did from December into the new year—bitcoin volume is heavily impacted. Naturally, some correlation is to be expected. But if we’re seeing the crypto come to its natural transaction volume state as speculation cools, the indication is that bitcoin’s natural use is only so large.

Bitcoin transaction volume has fallen to around its March 2016 levels.

However, there is good news. Fees for bitcoin transaction have fallen from over $13 million per day (chart) to around a half million today. In short, as the memepool has also largely cleared, implying a smaller set of transactions-in-waiting, it simply costs less to get your bitcoin transfer through. And thus, fees fall.

So you can send bitcoin to your friends now without it costing lunch. At the same time, that appears to happen when demand tanks. I presume that if and when bitcoin heats back up, we’ll see another feepocalypse.

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