Transaction Fees Dive Post-Halving, Impacting Miner Revenue

Following the fourth Bitcoin halving, transaction fees surged dramatically, accounting for 75% of miners' revenue on the day of the event. However, fees have since plunged to 35% of total miner revenue, which has also declined by approximately 35%. This drop is likely due to a decrease in network activity following the hype surrounding the halving, and the absence of major drivers such as the Runes protocol, which contributed to the initial surge in fees.

Transaction Fees Dip Significantly Post-Halving: CryptoQuant Analysis

The recent halving event, which occurred on Friday, has had a profound impact on the revenue structure of Bitcoin miners. A report by CryptoQuant reveals that transaction fees, which spiked significantly on the day of the halving, have now declined substantially.

Surging Fees During Halving

The fourth Bitcoin halving saw the block reward for miners slashed by 50%, reducing it from 6.25 bitcoins (BTC) to 3.125 BTC. This halved the daily issuance of new bitcoins from an average of 900 BTC to 450 BTC.

On the halving day, total daily miner revenue surged to $100 million, driven by a spike in transaction fees. Daily fees on the Bitcoin network reached a record high of 1,258 BTC ($80 million), constituting 75% of the total revenue for the day.

Runes Protocol Fuels Fee Surge

A major factor behind the high transaction fees was the launch of the Runes protocol on the halving block. Runes facilitates the issuance and transfer of fungible tokens by storing data in OP RETURN codes. The usage of these codes hit a record high of 512,000 on the halving day, contributing to the surge in fees.

Post-Halving Decline

However, within 24 hours of the halving, transaction fees returned to lower levels and have remained there. Fees currently represent only 35% of total miner revenue, which now hovers around $50 million. This marks a 35% decline from the pre-halving peak of roughly $78 million.

According to YCharts data, Bitcoin transaction fees have plunged from $80 million on April 20 to $6 million. Over the past week, they have averaged around $16 million, with the lowest figure recorded on April 26.

Implications for Miners

The combination of higher transaction fees and rising BTC prices has helped miners sustain their operations despite the halving's impact on block rewards. However, as fees continue to decline and BTC struggles to break past $64,000, some miners may face the prospect of shutting down their operations.

Hashrate Stability

Despite the concerns, CryptoQuant notes that it is still too early to assess the long-term effects of the halving on the network hashrate. Miners appear to be continuing their operations at a similar pace as before the halving. The Bitcoin network hashrate currently stands at 617 EH/s, while its hashprice has dropped to $0.07 per TH/s, the lowest level since October.

Conclusion

The post-halving period has witnessed a significant decline in transaction fees, raising concerns about the profitability of Bitcoin miners. With fees continuing to fall and BTC price facing challenges, it remains to be seen how the industry will adapt to this new reality.