Despite Bitcoin's surge to retest its 2017 highs, a combination of low on-concatenation transactions and macerated retail speculation has seen transaction fees remain low.

The current fees of around $3.50 per transaction starkly contrast with three years ago, when the fees incurred to send whatever amount of BTC briefly spiked above $l. But average transaction values are currently approaching $200,000, suggesting the current rally has non been accompanied by the same retail trading frenzy that drove prices toward $twenty,000 in 2017.

Ethereum (ETH) co-founder Vitalik Buterin doesn't believe Bitcoin'southward current low fees will last. In a Twitter thread, the Ethereum co-founder suggested that an inevitable increment in transaction fees will push out the bulk of users:

"Why do Bitcoin's unique features matter given that whatsoever wide adoption scenario will pb to base of operations chain fees pricing out near of those users and it's proving hard to extend those features to the L2s intended to circumvent those limitations?"

However, the data does not advise loftier fees are likely in the current environment. To understand what is happening in the background, it is important to await at the number of transactions being processed, the value of these transactions, and how much BTC is beingness held long term.

Bitcoin'due south memory pool, similar to a waiting room for transactions, shows the current number of daily unconfirmed transactions at 38,900 — around 20% of the 2017 figures.

Mempool Transaction Count. Source: Blockchain.com

It is worth noting that non but are the number of transactions significantly less than during the previous bull market, but this time effectually, there has been no increase in response to the price surge. In fact, the seven-day moving average shows an overall reject since the start of 2019.

Confirmed transactions per 24-hour interval. Source: Blockchain.com

In October, the average Bitcoin transaction surpassed the 2017 loftier of $150,000. Ten days ago, the average was higher up $190,000, suggesting that although the number of transactions has decreased, those that are still transacting are wealthier individuals or organizations.

Bitcoin users are as well property onto their coins rather than transacting with them this time around. The number of Bitcoin held on exchanges has been dropping fast. Data from analytics platform Glassnode Studio shows the yr-to-appointment change is down 18% as of November. 21.

Chainalysis suggested that the number of Bitcoin bachelor for buyers could exist as piddling equally 3.4 million, with the residual of the supply being held by long-term investors.