The Surge in Transaction Costs
Over the past three weeks, the transaction costs for bitcoin (BTC) and ethereum (ETH) have experienced a sharp increase. Just three days ago, the cost of transferring bitcoin reached a peak of $15 per transaction. Similarly, the average fee for ethereum transactions has soared by 219% from $2.08 to $6.64 per transaction between October 22 and November 12, 2023.
Parallel Trends in Ethereum and Bitcoin
Notably, the surge in ethereum fees mirrors the uptrend observed in bitcoin's transaction fees. This increase can be attributed to the rising cost of gas required for transferring these digital currencies. Currently, the average fee for an ether transaction stands at $6.64, with a median fee of 0.0013 ETH or $2.70 per transaction.
Differences in Fees for Non-Standard Ethereum Operations
While the average and median charges for ETH transactions closely align with those for bitcoin, there is a distinct variance when it comes to other types of operations on the Ethereum blockchain, such as engaging with a smart contract. Exchanging an ETH-based asset on a decentralized exchange (dex) platform can incur a fee ranging from $27.77 to $28.50 per transaction. Similarly, the cost of conducting a non-fungible token (NFT) transaction fluctuates between $46.93 and $48.16.
On Sunday, November 12, the estimated cost of transferring assets across different chains via bridging was $8.93 to $9.17. From October 22 to November 11, 2023, Ethereum processed an average of approximately 1,071,448 transactions daily.
When comparing ETH and BTC, BTC still maintains its lead in terms of market capitalization, daily trading volume, and the fees collected by validators within a 24-hour period. However, regardless of the perspective, transactions on these two blockchains, which have the highest market capitalization, are significantly more expensive than transactions on other layer one (L1) counterparts.
Share Your Thoughts
What are your thoughts on the rising cost of transferring ether? We would love to hear your opinions and perspectives on this subject. Please share your insights in the comments section below.
Frequently Asked Questions
Is buying gold a good retirement plan?
Although it may not look appealing at first, buying gold for investment is worth considering when you consider the global average gold consumption per year.
The most popular form of investing in gold is through physical bullion bars. There are other ways to invest gold. You should research all options thoroughly before making a decision on which option you prefer.
If you don’t need a safe place for your wealth, then buying shares of mining companies or companies that extract it might be a better alternative. Owning gold stocks should work well if you need cash flow from your investment.
ETFs allow you to invest in exchange-traded funds. These funds give you exposure, but not actual gold, by investing in gold-related securities. These ETFs may include stocks that are owned by gold miners or precious metals refining companies as well as commodity trading firms.
How does a Gold IRA account work?
For people who are looking to invest in precious materials, Gold Ira account accounts provide tax-free investments.
You can buy physical gold bullion coins at any time. You don't have to wait until retirement to start investing in gold.
You can keep gold in an IRA forever. You won't have to pay taxes on your gold investments when you die.
Your heirs can inherit your gold and avoid capital gains taxes. It is not required that you include your gold in the final estate report because it remains outside your estate.
First, an individual retirement account will be set up to allow you to open a golden IRA. Once you've done that, you'll receive an IRA custody. This company acts as an intermediary between you and IRS.
Your gold IRA custodian is responsible for handling all paperwork and submitting the required forms to the IRS. This includes filing annual reports.
After you have created your gold IRA, the only thing you need to do is purchase gold bullion. The minimum deposit required to purchase gold bullion coins is $1,000 If you make more, however, you will get a higher interest rate.
When you withdraw your gold from your IRA, you'll pay taxes on it. You'll have to pay income taxes and a 10% penalty if you withdraw the entire amount.
However, if you only take out a small percentage, you may not have to pay taxes. There are exceptions. However, there are exceptions. If you take 30% or more of your total IRA asset, you'll owe federal Income Taxes plus a 20% penalty.
Avoid taking out more that 50% of your total IRA assets each year. Otherwise, you'll face steep financial consequences.
Should You Invest Gold in Retirement?
This will depend on how much money and whether you were able to invest in gold at the time that you started saving. Consider investing in both.
Gold offers potential returns and is therefore a safe investment. This makes it a worthwhile choice for retirees.
Most investments have fixed returns, but gold's volatility is what makes it unique. This causes its value to fluctuate over time.
However, this does not mean that gold should be avoided. It is important to consider the fluctuations when planning your portfolio.
Another benefit to gold? It's a tangible asset. Gold is less difficult to store than stocks or bonds. It can also be transported.
You can always access your gold if it is stored in a secure place. Additionally, physical gold does not require storage fees.
Investing in gold can help protect against inflation. Because gold prices tend to rise along with other commodities, it's a good way to hedge against rising costs.
You'll also benefit from having a portion of your savings invested in something that isn't going down in value. Gold usually rises when the stock market falls.
Gold investment has another advantage: You can sell it anytime. Like stocks, you can sell your position anytime you need cash. You don't even need to wait for your retirement.
If you do decide to invest in gold, make sure to diversify your holdings. Don't place all your eggs in the same basket.
Don't purchase too much at once. Start by purchasing a few ounces. You can add more as you need.
Don't expect to be rich overnight. Instead, the goal here is to build enough wealth to not need to rely upon Social Security benefits.
Although gold might not be the right investment for everyone it could make a great addition in any retirement plan.
What's the advantage of a Gold IRA?
The benefits of a gold IRA are many. It's an investment vehicle that lets you diversify your portfolio. You decide how much money is put in each account and when it is withdrawn.
You also have the option to transfer funds from other retirement plans into a IRA. This allows you to easily transition if your retirement is early.
The best thing about investing in gold IRAs is that you don’t need any special skills. They are readily available at most banks and brokerages. Withdrawals can happen automatically, without any fees or penalties.
But there are downsides. Gold has always been volatile. Understanding why you want to invest in gold is essential. Are you looking for safety or growth? Is it for security or long-term planning? Only then will you be able make informed decisions.
You might want to buy more gold if you intend to keep your gold IRA for a long time. You won't need to buy more than one ounce of gold to cover all your needs. Depending upon what you plan to do, you could need several ounces.
You don’t necessarily need a lot if you’re looking to sell your gold. You can even manage with one ounce. But, those funds will not allow you to buy anything.
What Is a Precious Metal IRA?
You can diversify your retirement savings by investing in precious metal IRAs. This allows you to invest in gold, silver and platinum as well as iridium, osmium and other rare metals. These are “precious metals” because they are hard to find, and therefore very valuable. They make excellent investments for your money and help you protect your future from inflation and economic instability.
Bullion is often used to refer to precious metals. Bullion refers simply to the physical metal.
Bullion can be bought through many channels, including online retailers, large coins dealers, and some grocery shops.
An IRA for precious metals allows you to directly invest in bullion instead of purchasing stock shares. You'll get dividends each year.
Precious metal IRAs do not require paperwork nor annual fees, unlike regular IRAs. Instead, your gains are subject to a small tax. Additionally, you have access to your funds at no cost whenever you need them.
How much should precious metals be included in your portfolio?
To answer this question, we must first understand what precious metals are. Precious metals refer to elements with a very high value relative other commodities. This makes them very valuable in terms of trading and investment. Gold is currently the most widely traded precious metal.
However, many other types of precious metals exist, including silver and platinum. The price for gold is subject to fluctuations, but stays relatively stable in times of economic turmoil. It is also relatively unaffected both by inflation and deflation.
All precious metals prices tend to rise with the overall market. They do not always move in the same direction. If the economy is struggling, the gold price tends to rise, while the prices for other precious metals tends to fall. Investors are more likely to expect lower interest rates making bonds less attractive investments.
The opposite effect happens when the economy is strong. Investors favor safe assets like Treasury Bonds, and less precious metals. Since these are scarce, they become more expensive and decrease in value.
To maximize your profits when investing in precious metals, diversify across different precious metals. You should also diversify because precious metal prices can fluctuate and it is better to invest in multiple types of precious metals than in one.
- Indeed, several financial advisers interviewed for this article suggest you invest 5 to 15 percent of your portfolio in gold, just in case. (aarp.org)
- This is a 15% margin that has shown no stable direction of growth but fluctuates seemingly at random. (smartasset.com)
- (Basically, if your GDP grows by 2%, you need miners to dig 2% more gold out of the ground every year to keep prices steady.) (smartasset.com)
- If you take distributions before hitting 59.5, you'll owe a 10% penalty on the amount withdrawn. (lendedu.com)
- Gold is considered a collectible, and profits from a sale are taxed at a maximum rate of 28 percent. (aarp.org)
- Yahoo Finance – Barrick Gold Corporation Stock Price, News & Quote – Barrick Gold Corporation (GOLD).
- Saddam Hussein's InvasionHelped Uncage a Bear in 1990 – WSJ
- Are you interested in keeping gold in your IRA at-home? It's Not Exactly Lawful – WSJ
- Gold IRA: Add some sparkle to your retirement nest egg
- Understanding China's Evergrande Crisis – Forbes Advisor
The History of Gold as an Asset
From the beginning of history, gold was a popular currency. It was popular because of its purity, divisibility. uniformity. scarcity and beauty. Because of its intrinsic value, it was also widely traded. Because there were no internationally recognized standards for measuring and weighing gold, the different weights of this metal could be used worldwide. For example in England, a pound sterling equals 24 carats. In France, a livre tournois equals 25. Carats of golden. Germany had one mark which equals 28. Carats.
In the 1860s, the United States began to issue American coins made from 90% copper, 10% Zinc, and 0.942 Fine Gold. This caused a drop in foreign currency demand which resulted in an increase of their prices. At this point, the United States minted large amounts of gold coins, causing the price of gold to drop. They needed to pay off debt because they had too much money coming into circulation. They decided to sell some excess gold to Europe in order to do this.
Because most European countries did not trust the U.S. dollar, they started accepting gold as payment. Many European countries started to accept paper money as a substitute for gold after World War I. The price of gold rose significantly over the years. Even though the price of gold fluctuates, it remains one the best investments you can make.
By: Jamie Redman
Title: The Rising Cost of Transferring Ether (ETH) and Bitcoin (BTC)
Sourced From: news.bitcoin.com/ethereum-transaction-fees-climb-219-in-3-weeks-as-onchain-crypto-transfers-become-pricier/
Published Date: Sun, 12 Nov 2023 21:00:34 +0000