Average Bitcoin transaction fees have sunk to lows of $7, according to data from blockchain analytics site BitInfoCharts. Fees haven’t been this low since January.
The blockchain charges a fee for each transaction and distributes the proceeds to miners.
Fees rise when demand for processing transactions outstrips the supply of miners. On April 21, average fees hit a record high of $62.8 per transaction.
Conversely, fees fall when mining supply outstrips demand. The drop in fees suggests Bitcoiners aren’t as interested in placing transactions as they were just over a month ago.
That could have something to do with the recent crash in the crypto markets, which sent the price of Bitcoin down from $60,000 to $36,000 in just a few weeks.
Bitcoin miners are also not as interested in processing transactions. Mining difficulty—the amount of computing power required to validate Bitcoin transactions—fell by 16% on Sunday—the sharpest decline in over a year. Bitcoin mining becomes easier when the overall hash power backing the blockchain decreases.
Ethereum fees are down, too, thanks to a general cooling-off in the crypto market. The global crypto market cap fell from peaks of about $2 trillion last month to current levels of $1.6 trillion, according to metrics site CoinGecko.
Lower prices, fees, and hash power follow government crackdowns on Bitcoin mining in China, where the majority of miners are located. Crypto exchanges Huobi and OKEx have already started limiting certain transactions, and officials in Inner Mongolia are considering banning Bitcoin mining outright.