Bitcoin Transaction Fees Plummet After Record Halving Peak

Bitcoin transaction fees have plummeted since hitting a record high of $128 on April 20, falling to $8-10 for medium-priority transactions. The decline follows a surge in fees on the halving day, with over $2.4 million paid to miner ViaBTC in the halving block. Despite the lower block subsidy, miners are still receiving decent rewards thanks to these high fees.

Bitcoin Transaction Fees Plummet After Halving Peak

April 22, 2021

Just a day after reaching a record average of $128 on April 20, the average fees paid on Bitcoin (BTC) transactions have plummeted significantly. As of April 21, medium-priority transactions are incurring fees of approximately $8-10, according to data from mempool.space.

This sharp decline comes after Bitcoin reached an all-time high in daily transaction fees on April 20, clocking in at $78.3 million. This figure surpassed Ethereum fees by more than 24 times, according to Crypto Fees.

The surge in fees on April 20 was largely driven by the Bitcoin halving, an event that occurs approximately every four years and reduces the block reward for miners by half. The halving block (block 840,000) included a staggering 37.7 Bitcoin ($2.4 million) paid to Bitcoin miner ViaBTC, making it the most expensive block in the network's history.

Much of the demand for space in block 840,000 stemmed from enthusiasts seeking to inscribe rare satoshis (the smallest unit of Bitcoin) using the Runes protocol, a new token standard that launched at the halving block.

While block fees remained elevated until approximately block 840,200, they have since fallen to an average of 1-2 Bitcoin.

Despite the halving, the large block fee payouts initially shielded miners from the impact of the block subsidy reduction from 6.25 Bitcoin to 3.125 Bitcoin. However, with average block fees now well below 3.125 Bitcoin, miners may begin to feel the financial strain.

Meanwhile, Bitcoin fees have surpassed Ethereum fees for six consecutive days (April 15-20), averaging $17.8 million over the past seven days.

It is important to note that the halving event did not have a significant impact on Bitcoin's price, which has risen by approximately 1.5% since the halving to $64,840, according to CoinGecko.