Bitcoin network transaction fees fell by 18% this week, adding to a previous 27% drop. This ongoing decline follows the peak fees seen during the halving event.
According to IntoTheBlock, fees on the Bitcoin network have now reached their lowest level since November 2023.
Bitcoin Transaction Fees Soar and Then Drop
Three months ago, Bitcoin saw the highest transaction fees among all protocols, including Ethereum, just before the latest halving event. This spike in fees was largely driven by increased network activity due to the launch of the Runes protocol on the day of the halving. Runes enables the issuance and transfer of fungible tokens and works alongside the Ordinals protocol, which introduced non-fungible tokens (NFTs) to Bitcoin. This combination led to a surge in network activity, significantly raising transaction fees.
However, following the halving event, Bitcoin transaction fees began to decline. Fees dropped from 75% of Bitcoin miners’ revenue before the halving to 35% afterward. On the day of the halving, daily Bitcoin fees peaked at $80 million. Currently, weekly fees have decreased to below $6 million.
Bitcoin Transaction Fees Plummet Amid Decreased Network Activity
Data from Mempool.space indicates that the average cost of a Bitcoin transaction has dropped to approximately 5 sat/vByte, or about $0.0029. This is a significant decrease from the 90 sat/vByte, or $8.50, recorded in mid-April. YCharts data further reveals that Bitcoin currently generates less than $1 million in daily transaction fees. The last time the network saw $1 million in transaction fees was on July 3rd; by July 11th, the fee amount had decreased to $721,599.
The decline in transaction fees can be attributed to a reduction in network activity, which is partly related to the broader market downturn. Bitcoin’s value has also dropped significantly over the past few weeks, reaching levels not seen since late February. Despite this, some analysts believe that the recent surplus from German authorities could soon diminish, potentially setting the stage for a rise in Bitcoin’s value. Whether transaction fees will follow this trend remains to be seen.
Important: Please note that this article is only meant to provide information and should not be taken as legal, tax, investment, financial, or any other type of advice.
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