The recent CryptoQuant report has highlighted a significant drop in the portion of Bitcoin miner revenue derived from transaction fees. This decline comes after a surge on the day of the last halving event. The fourth Bitcoin halving, which occurred last Friday, resulted in miner block rewards being cut in half to 3.125 bitcoins (BTC). This led to a decrease in daily issuance from an average of 900 BTC to 450 BTC.
On the day of the halving event, daily miner revenue spiked to $100 million due to a notable increase in transaction fees. Daily fees on the Bitcoin network reached 1,258 BTC ($80 million), representing 75% of the total revenue for that day. The Runes protocol played a significant role in driving up transaction fees by facilitating the issuance and transfer of fungible tokens through the storage of data in OP RETURN codes. However, within 24 hours after the halving, transaction fees returned to lower levels and have since remained there. Fees now make up 35% of total miner revenue, with daily revenue hovering around $50 million.
With the decline in transaction fees and the struggle of BTC to surpass $64,000, miners are facing challenges in sustaining their operations. Higher transaction fees and an increase in BTC prices are essential for miners to remain profitable, especially considering the reduction in block rewards. If the current trend continues, some miners may be forced to shut down their operations.
Despite the immediate impact of the halving event on transaction fees and miner revenue, it is too early to determine the long-term effects on the network hashrate. Data from CryptoQuant suggests that miners are continuing to operate at a similar rate as before the halving. The current Bitcoin network hashrate stands at 617 EH/s, with the hashprice at $0.07 per TH/s, the lowest level since October.
The decline in Bitcoin miner revenue from transaction fees following the fourth halving event highlights the challenges faced by miners in maintaining profitability. The fluctuations in transaction fees, coupled with the reduction in block rewards, emphasize the importance of higher BTC prices for miners to sustain their operations. The long-term effects on the network hashrate remain uncertain, but miners must adapt to the changing landscape to thrive in the evolving cryptocurrency market.