Crypto market falls as transaction costs rise
By Robert Davis
18:32, 28 December 2021
Many of the largest cryptocurrency assets by market capitalisation were down more than 5% Tuesday as rising transaction costs continue to eat away at mining profits.
Around mid-day EST (UTC-5), bitcoin fell to $48,650 per unit.
Ethereum was trading more than 8% below its pre-Christmas rally at $3,816 per unit, while other popular assets such as polkadot and shiba inu were down more than 10%.
Rising transaction costs
Rising transaction costs are one reason why the crypto market is missing out on the recent rally that equity investors have seen.
According to CoinDesk data, the average transaction cost was $2.75 over the past 24 hours. This total is calculated by dividing the number of transactions from a miner’s total revenue.
Meanwhile, the total hash rate of active miners has nearly recovered from its slump in early December. More than 178 million transactions have been hashed over the last 24 hours compared with the high of 181.7 million that was recorded on 9 December.
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Sinking mining stocks
The lower waters in the crypto market also dragged down lower mining stocks on the New York Stock Exchange.
For instance, Riot Blockchain, Marathon Digital Holdings and Hut 8 all traded considerably lower on Tuesday.
Riot sank more than 9.6% to $23.41 per share, while Marathon Digital lost more than 11% of its value, down to $34.97 per share.
Hut 8 saw the most significant loss of the group, losing more than 13% of its value, down to $7.67 per share.
Read more: Alibaba to stop selling crypto mining rigs
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