This situation could be linked to Tether’s migration to Ethereum this year. ETH has surpassed BTC’s daily transaction fees several times during 2019.
Ethereum’s daily transaction fees are about to outperform Bitcoin’s, according to an analysis released by Coin Metrics on September 17th. According to data provided by these researchers, this may be the result of the increased use of the Ethereum platform for the issuance of the USD-pegged cryptocurrency or stablecoin Tether (USDT) recorded since early this year.
The report notes that until September 15th ETH had daily transaction fees of USD 182,899, while BTC reported USD 185,993 for the same date. It adds that Ethereum has surpassed Bitcoin’s daily transaction fees several times in the course of 2019. It should be remembered that such a situation arose, for example, on February 19th and March 18th, when ETH fees surpassed BTC’s daily fees.
Regarding this, the analysts prepared a graph showing the trend of the fees of both networks since early 2018. It shows that throughout the last year there have been short periods in which ETH had higher daily transaction fees than BTC; however, BTC has been at the top most of the time.
It is worth noting that from early April to mid-August 2018, BTC’s daily transaction fees increased before those of ETH, mostly from 5 to 10 times during the four-month period. However, the statistics show a change this year that, in the researchers’ opinion, has to do with Tether’s migration to Ethereum.
In the last month, Bitcoin’s transaction fees have collapsed while Ethereum’s have skyrocketed. There may be many factors involved, but there is one that has probably played a major role in this reversal: Tether’s migration to Ethereum.
Growth of Tether in Ethereum
USDT was initially created in the Omni protocol, based on the Bitcoin blockchain. However, since early this year it supports a version of its token in the Ethereum protocol (USDT/ETH).
From this milestone, transactions in Omni began to decline steadily. Tether users have been migrating to the Ethereum version. Those transactions began to rise since last March, when they reached almost 20%, according to previous data from Coin Metrics.
This suggests that the recent ETH/BTC fee change is a consequence of the change from USDT (Omni) to USDT/ETH. If this is the case, the fee change could continue growing as more users switch to the Ethereum version.
Although the report indicates that the USDT on Omni rose throughout most of 2019, reaching new all-time highs in April, it explains that since August USDT/ETH has skyrocketed. The Ethereum version of Tether reached a new all-time high of 187,912 daily transactions on September 9th.
The study notes that USDT/ETH recently accounted for more than 25% of all Ethereum transactions, and has consistently accounted for more than 10% of all transactions since mid-August. The growth is noticeable that month, when Tether’s total offering reached an all-time high of 4.27 billion units.
Among other data, the team adds that USDT/ETH also surpassed USDT-Omni in the adjusted daily transfer value, whilst addresses with balances of at least USD 10 show a similar pattern. Additionally, Tether has become the largest GAS spender of all Ethereum contracts in the last 30 days, while ETH fees, as a percentage of the miners’ total revenues, have begun to rise ahead of BTC.
By Willmen Blanco