Ethereum Pectra Upgrade and Bitcoin Fees: What’s Behind the Low Transaction Costs in 2025?
Ethereum and Bitcoin Maintain Low Transaction Fees Amid Network Upgrades
As of May 18, 2025, both Ethereum and Bitcoin continue to offer relatively low transaction fees, reflecting recent network upgrades and evolving market dynamics.
Ethereum’s Pectra Upgrade: Enhancing Efficiency
On May 7, 2025, Ethereum implemented the Pectra upgrade, introducing 11 Ethereum Improvement Proposals (EIPs) aimed at improving transaction speed, reducing costs, and enhancing scalability. Key changes include:
Increased Gas Limit: The gas limit was raised to 100 million, allowing more transactions per block and reducing congestion.
Calldata Cost Adjustment: EIP-7623 increased the gas cost of calldata from 16 to 42 gas per byte, encouraging the use of more efficient data storage methods.
Enhanced Staking Flexibility: Validators can now stake up to 2,048 ETH, up from the previous 32 ETH limit, promoting greater network participation.
These upgrades have contributed to a sustained period of low gas fees. As of May 17, the average gas price is approximately 1.986 gwei. This translates to median transaction fees around $0.15, with simple transfers costing as little as $0.03. More complex operations, such as token swaps and NFT sales, range between $0.48 and $0.82.
Bitcoin’s Fee Landscape: Stability Amidst Growth
Bitcoin’s transaction fees have also remained modest. The average fee stands at approximately $2.55, with high-priority transactions requiring about 6.8 satoshis per virtual byte. This stability is notable given Bitcoin’s price hovering around $104,500.
Recent data indicates that transaction fees constituted 1.14% of Bitcoin miners’ rewards, totaling approximately $3.84 million over the past week. This shift underscores the growing importance of transaction fees in sustaining the network, especially as block rewards diminish over time.
Market Implications and Outlook
The sustained low fees on both networks enhance their appeal for various applications, from decentralized finance to everyday transactions. Ethereum’s Pectra upgrade positions it for improved scalability and user experience, while Bitcoin’s fee stability supports its role as a store of value and medium of exchange.
As the cryptocurrency landscape evolves, these developments reflect a broader trend toward more efficient and user-friendly blockchain networks.
