Bitcoin Transaction Fees Plummet to Equal Ethereum Levels Post-Halving

After the initial surge following the Bitcoin halving and the launch of the Runes protocol, daily Bitcoin transaction fees have returned to similar levels as Ethereum. The seven-day moving average of Bitcoin transaction fees peaked at $25.8 million but has since dropped to $4.1 million, comparable to Ethereum's daily average. Similarly, average individual transaction fees on Bitcoin, which had reached a high of $40, have now stabilized at $8.60, still double Ethereum's average. The decline coincides with a reduction in Runes-related transaction activity, which had significantly contributed to the initial fee spike.

Bitcoin Transaction Fees Plummet Post-Halving, Equaling Ethereum Levels

As the frenzy surrounding the launch of the Runes protocol subsides, the average daily transaction fees for Bitcoin (BTC) have plummeted back down to the same level as Ethereum. This decline comes after a surge in activity and fees associated with the protocol's launch.

During the peak of the Runes hype on April 24th, the seven-day moving average of daily Bitcoin transaction fees reached an all-time high of $25.8 million, more than five times higher than Ethereum's fees at the time. However, this surge was short-lived, and by Wednesday, the average had fallen to $4.1 million, matching Ethereum's average.

Similarly, individual transaction fees on Bitcoin spiked to $40 on April 24th, ten times higher than Ethereum's fees. While these fees have since dropped to $8.60 on Wednesday, they remain more than double Ethereum's average of $3.40.

Runes Transaction Fee Windfall Fizzles Out

After Bitcoin's fourth halving, block 840,000 generated a record-breaking $2.4 million in transaction fees, far exceeding the approximate $200,000 block subsidy reward. This trend continued for an unprecedented 104-block period, where transaction fee rewards surpassed the subsidy, according to data from Bitcoin explorer Mempool.

While transaction fee rewards have since decreased, they still account for a significant 13% of total block rewards on a seven-day moving average basis, compared to around 3% before the halving.

Runes Hype Fueled Transaction Fee Spike

Much of the recent surge in transaction fee activity can be attributed to the hype surrounding Runes, a new fungible token standard launched on Bitcoin at the time of the halving. Runes generated over $135 million in fees for miners during their first week alone.

The Runes protocol was developed by Ordinals creator Casey Rodarmor as a more efficient solution for creating tokens on Bitcoin compared to BRC-20 tokens that use Ordinals inscriptions. Data from the Runes marketplace Unisat indicates that around 65,000 Runes tokens have been minted to date, driving up the demand for network blockspace and, consequently, transaction fees.

Among the tokens created under the Runes standard, DOG stands out as the most notable, boasting a market cap of approximately $350 million, according to data from Magic Eden.

Conclusion

The recent surge in Bitcoin transaction fees has subsided, and fees have now returned to levels comparable to Ethereum. While the Runes protocol contributed significantly to the initial spike, its impact has diminished as the hype surrounding the launch has faded. Nonetheless, the halving has had a lasting impact on Bitcoin's fee structure, with transaction fees now accounting for a larger proportion of total block rewards.