blockworks.co 14 h Reading time: ~3 m
Bitcoin price predictions are always absolutely everywhere. Everyone who pays attention to crypto, whether for investing, building or entertainment, cannot avoid reading daily wild headlines about where the price of BTC is heading.
“The Fed May Have Just Triggered a $100 Billion Bitcoin Price Boom as Ethereum Surges Back,” “Bitcoin Price Drops Below $28,000 Post Labor Day – Rough Road Ahead,” and “Bitcoin at $100,000? Insiders Say the Cryptocurrency Could Test New Highs This Year,” are some of my recent favorites.
From $1,000,000 price bets to the proverbial “imminent crash,” those who have been around long enough in this space have either learned to tune predictions out or play into their hyped narrative themselves.
With the next bitcoin halving event less than a year away, it’s a given that prices will move, maybe even wildly. So it’s time we stop predicting the price of bitcoin like it’s something interesting, useful, or even, frankly, predictable at all.
Instead, there’s an argument to be made that a new challenger to the bitcoin price prediction has entered the room — a contender for new predictions that could actually bring some useful insight to the community.
The challenger? Bitcoin transaction fees.
If we were able to provide more insight about bitcoin transaction fees, our predictions could actually be useful instead of hollow headline grabbers — we could help users find the lowest fee moments to dive into new use cases on Bitcoin, or help builders develop and scale Bitcoin layers more efficiently.
Bitcoin was meant to scale
Interest surrounding all aspects of the Bitcoin blockchain has hit record levels, as Ordinals, Stamps, BRC-20 tokens and other new protocols have sprouted up this year. Bitcoin’s average daily transactions over seven days reached record highs, the first time it’s done so since December 2017. We’re entering this era where people actually want to do something more with Bitcoin than just point out its price.
Glassnode reported that the average transactions reached 586,704.42 throughout May. The average transaction fee reached as high as seven dollars, as Ordinal inscriptions surpassed three million in May 2023.
The thing we have forgotten is Bitcoin was always meant to scale. Low fees were always going to be temporary. That’s why Bitcoin layer-2 solutions exist. As is the case with every other major layer-1 blockchain, when the base layer began to bloat, layer-2s were designed to efficiently scale usage and reprioritize where demand went toward the base layer.
Read More: Ron DeSantis Posturing On Bitcoin Is Just Performative Politics
The Bitcoin builders community has talked about the idea of DeFi and other use cases coming back to Bitcoin from other layer-1s for years, and now we are seeing that prediction become a reality. This revival of activity for Bitcoin means that the day-to-day price of transaction fees is going to matter more for many users than the daily moving average cost of one BTC.
I’ll go first with this new prediction model.
I predict that we will see another 10x from here in transaction fees.
As the Bitcoin thesis continues playing out, and as layer-1 apps grow and scale into layer-2s, we will see multiple spikes in the daily transaction price that will worry some and excite others. Ultimately, the higher fees will benefit the entire Bitcoin community.
Now, it’s your turn.
Rena Shah is the Head of Operations & Strategy at Trust Machines, a company building the largest ecosystem of applications on Bitcoin. Previously, she was the Head of Exchange at Binance.US, where she grew the exchange from $30M to $3B in daily trading volume within 18 months. Shah is a veteran in the crypto space with previous roles at Ember Fund, a retail-focused app, and with a market maker, Apifiny. Rena spent time on the commodities side with a unique background as a drilling engineer. She spent her early career offshore on drilling rigs while spinning up Bitcoin mining pools.