The Surge in Transaction Costs
Over the past three weeks, the transaction costs for bitcoin (BTC) have experienced a sharp increase, reaching a peak of $15 per transfer just three days ago. Similarly, the cost to transfer ethereum (ETH) has also seen a significant jump. From October 22 to November 12, 2023, the average fee for ethereum transactions has soared by 219%, rising from $2.08 to $6.64 per transaction.
Parallel Trends in Ethereum and Bitcoin
The surge in ethereum (ETH) fees closely mirrors the upward trend seen in bitcoin's transaction fees. The rising expense associated with the gas required for transferring these digital currencies has led to an escalation in costs during this period. Currently, the average fee for an ether transaction stands at $6.64, with the median fee at 0.0013 ETH, equivalent to $2.70 per transaction.
Divergence in Smart Contract Operations
While the cost to transfer ether aligns closely with bitcoin's transfer fees, 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 expense for conducting a non-fungible token (NFT) transaction fluctuates between $46.93 to $48.16.
Transaction Costs for Bridging and Layer One (L1) Counterparts
On Sunday, November 12, the cost of transferring assets across different chains via bridging was estimated to be $8.93 to $9.17. From October 22, 2023, to November 11, 2023, Ethereum processed an average of approximately 1,071,448 transactions daily.
When comparing the 'Flippening Watch' for ETH and BTC, BTC still leads in terms of market capitalization, daily trading volume, and the 24-hour fees collected by validators compared to what BTC miners earn. However, regardless of the perspective, transactions on these two blockchains, which are the market cap leaders, are significantly more expensive than their other layer one (L1) counterparts.
Share Your Thoughts
What are your thoughts on the rising cost of moving ether? We would love to hear your opinions and insights on this subject. Please share them in the comments section below.
Frequently Asked Questions
What precious metals could you invest in to retire?
Understanding what you have now saved and where you are currently saving money is the first step in retirement planning. If you don't know how much you currently have saved, start by taking an inventory of everything you own. This includes all savings accounts and stocks, bonds or mutual funds. It also should include certificates of Deposit (CDs), life insurance policies. Annuities, 401k plans, real-estate investments, and other assets like precious metals. Then add up all of these items to determine how much you have available for investment.
If you are younger than 59 1/2, you might want to open a Roth IRA account. A Roth IRA, on the other hand, allows you to subtract contributions from your taxable revenue. However, you won't be able to take tax deductions for future earnings.
If you decide you need more money, you will likely need to open another investment account. Start with a regular brokerage account.
Which type of IRA is the best?
The most important thing when choosing an IRA for you is to find one that fits within your goals and lifestyle. You must consider whether you want to maximize tax-deferred growth on your contributions, minimize taxes now and pay penalties later, or just avoid taxes altogether.
If you're saving for retirement and don't have much money invested, the Roth option could make sense. The Roth option is also a smart choice if you work beyond the age of 59 1/2 and plan to pay income tax on any withdrawals.
If you plan to retire early, the traditional IRA might make more sense because you'll likely owe taxes on the earnings of those funds. However, if your goal is to retire early, the traditional IRA might be more sensible. The Roth IRA allows you to withdraw some of your earnings or all without paying taxes.
What precious metals can be allowed in an IRA?
The most common precious metal used for IRA accounts is gold. Investments in gold bullion coins or bars can be made as well.
Precious and precious metals are considered safe investments, as they don’t lose their value over the course of time. They're also considered a great way to diversify an investment portfolio.
Precious metals are silver, palladium, and platinum. These three metals are similar in their properties. Each metal has its own unique uses.
One example is platinum, which is used to create jewelry. The catalysts are made from palladium. To produce coins, silver can be used.
Consider how much you plan to spend on gold when deciding on which precious metal to buy. A lower-cost ounce of gold might be a better option.
Also, think about whether or not you wish to keep your investment secret. If you do, you should choose palladium.
Palladium has a higher value than gold. It's also more rare than gold. It is likely you will need to pay more.
Storage fees are another important consideration when choosing between silver and gold. Storage fees for gold are determined by its weight. You will pay more if you store larger amounts.
Silver is measured in volume. You'll be charged less for smaller amounts.
You should follow all IRS rules if you plan to store precious metals in an IRA. This includes keeping track, and reporting to the IRS, all transactions.
- Depending on your financial situation, most experts recommend you invest no more than 5% to 10% of your retirement funds in precious metals. (forbes.com)
- You can only purchase gold bars of at least 99.5% purity. (forbes.com)
- Silver must be 99.9% pure • (forbes.com)
- If you accidentally make an improper transaction, the IRS will disallow it and count it as a withdrawal so that you would owe income tax on the item's value and, if you are younger than 59 ½, an additional 10% early withdrawal penalty. (forbes.com)
How to Buy Gold For Your Gold IRA
A term that describes precious metals is gold, silver and palladium. It refers only to elements with atomic number 79-110 (excluding helium). These elements are considered valuable because they are rare and beautiful. Precious metals that are most commonly used include silver and gold. Precious metals are often used as money, jewelry, industrial goods, and art objects.
Due to supply and demand, the price of gold fluctuates every day. As investors seek safety from unstable economies, there has been an increase in demand for precious metals in the last decade. Prices have increased significantly because of this demand. Some people are concerned about investing in precious metals due to the rising cost of production.
Because gold is rare and durable, it makes a good investment. Unlike many investments, gold never loses value. Gold can be bought and sold without tax. You have two options to invest in gold. You can buy bars and gold coins, or invest into gold futures contracts.
Instant liquidity is provided by physical gold coins and bars. They are easy and convenient to trade or store. They do not offer any protection against inflation. Consider purchasing gold bullion if you want to be protected from rising prices. Bullion can be defined as physical gold. It comes in different sizes. While some billions are sold in one-ounce portions, others come in larger pieces such as kilobars. Bullion is stored in vaults that are protected against theft and fire.
You might prefer to own shares of gold than actual gold. If so, then you should look into buying futures gold. Futures let you speculate about how gold's price might change. You can expose yourself to the price of gold by buying gold futures without having to own the physical commodity.
For example, if I wanted to speculate on whether the price of gold would go up or down, I could purchase a gold contract. My position when the contract expires is either “long”, or “short”. If I have a long contract, it means that I believe gold's price will rise. In exchange, I'll give money now and promise to get more when the contract ends. On the other hand, a short contract means that I think the price of gold will drop. In exchange for making less money in the future, I am willing to accept the money now.
I will receive the amount of gold in the contract, plus interest, when the contract ends. This gives me exposure to the gold price, but I don't have to own it.
Because they are extremely difficult to counterfeit, precious metals make great investments. While paper currency can be easily counterfeited simply by printing new notes, precious metals cannot. Precious metals have remained stable over time because of this.
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