The Decline of Bitcoin Miner Revenue from Transaction Fees Post-Halving

The recent CryptoQuant report exposed a significant drop in the percentage of Bitcoin miner revenue derived from transaction fees. Initially surging to 75% on the day of the last halving event, transaction fees now only make up 35% of total miner revenue. This decline is a cause for concern, especially considering the impact of the halving on miner block rewards.

The fourth Bitcoin halving, which occurred recently, saw a reduction in miner block rewards by half to 3.125 bitcoins (BTC). As a result, daily issuance plummeted from 900 BTC to 450 BTC. This event triggered a spike in daily miner revenue to $100 million, mainly driven by a surge in transaction fees. On the halving day, transaction fees reached an all-time high of 1,258 BTC ($80 million), accounting for 75% of total revenue.

One of the key factors behind the record-high transaction fees was the Runes protocol, which fueled network activity post-halving. This protocol enables the issuance and transfer of fungible tokens through the use of data stored in OP RETURN codes. Within 24 hours of the halving event, transaction fees reverted to lower levels, hovering around 35% of total miner revenue, which has now dropped to approximately $50 million.

Bitcoin transaction fees have tumbled from $80 million on April 20 to a mere $6 million, with an average of $16 million over the past week. This drop, coupled with the struggle of BTC prices to surpass $64,000, poses a threat to miners’ sustainability, considering their slashed block rewards. Some miners may face the harsh reality of having to cease operations if this downward trend persists.

Despite the immediate repercussions of the halving on miner revenue and transaction fees, it is too early to gauge the long-term effects on the network hashrate. Currently standing at 617 EH/s, with a hashprice at $0.07 per TH/s, the lowest since October. Miners seem to be continuing their operations at a steady pace post-halving. However, the sustainability of this trend remains uncertain in the face of declining transaction fees and revenue.