Bitcoin’s Rising Transaction Fees Signal Increased Demand for Blockspace
According to data from The Block, Bitcoin’s transaction fees have risen alongside its price, signaling increased demand for the blockspace of the world’s largest cryptocurrency.
On Sunday, Bitcoin’s price reached nearly $106,000, surpassing a recent high of $105,600 seen on May 12. Although BTC dipped slightly after, it currently trades at around $104,500.
Fees Hit New 2025 Highs
As Bitcoin’s price climbs, so do its transaction fees. The seven-day moving average transaction fee has risen by $1 since the start of May, now standing at $2.40. This is the highest fee recorded so far in 2025, as reported by The Block.
Bitcoin’s Dominance Sees an Uptick
Alongside the increase in fees, Bitcoin’s dominance has also seen a slight rise, recovering from a dip two weeks ago. This could indicate that the recent price pullback in Bitcoin compared to other cryptocurrencies was likely driven by liquidity issues rather than a shift towards an “altcoin season.”
Transaction Volume Drops Despite Higher Fees
Interestingly, the rise in transaction fees seems to be balanced by a decrease in the average number of daily transactions. On April 22, BTC processed 507,000 transactions, but that number has since fallen by 35%, dropping to 330,000, according to The Block’s data.
Illiquid Supply Hits New Record
Bitcoin’s illiquid supply, which refers to BTC held in wallets with minimal spending activity, has recently reached an all-time high, according to Glassnode data. The decrease in the supply of Bitcoin available on exchanges suggests that a surge in demand could lead to a supply shock, potentially pushing prices even higher.
Kosta has reported on cryptocurrency markets and blockchain infrastructure since 2020, bringing over six years of hands-on experience in the crypto industry built through daily tracking of markets, trends, and emerging blockchain developments. Specializing in Bitcoin on-chain analysis, institutional ETF flows, and digital asset price action, his work at Coindoo has been cited by other news agencies and consistently covers market developments with a focus on data-driven reporting across Bitcoin, Ethereum, Solana, and XRP. Over the years, Kosta has contributed to multiple crypto media outlets in different regions, authoring over 6,000 articles across the sector. His reporting spans cryptocurrency markets and the broader fintech industry, tracking not only price action but also the technological and regulatory forces shaping the ecosystem. To support his analysis, Kosta actively leverages on-chain data and metrics from leading platforms such as Santiment, Glassnode, and CryptoQuant, enabling deeper, evidence-based market insights. He believes in the power of transparency and the data that underpins the blockchain ecosystem. His academic background in Marketing Management from Denmark further complements his analytical approach, adding a strong understanding of communication strategy and content positioning to his work.
