The recent halving event in the Bitcoin network had a significant impact on the revenue generated by miners from transaction fees. According to a report by CryptoQuant, the portion of miner revenue coming from transaction fees has dropped to 35% from a high of 75% on April 19. This decline showcases the volatility and unpredictability of miner income in the cryptocurrency world.
The fourth Bitcoin halving, which occurred last Friday, cut miner block rewards in half to 3.125 bitcoins. This reduction led to a decrease in daily issuance from an average of 900 BTC to 450BTC. Despite a surge in daily miner revenue to $100 million on the halving day, driven by a notable spike in transaction fees, the subsequent days saw a sharp decline in fees and revenue.
A major factor contributing to the high transaction fees on the halving day was the Runes protocol. This protocol facilitated the issuance and transfer of fungible tokens through OP RETURN codes. The launch of the Runes protocol saw a record high of 512,000 code transactions within 24 hours, driving up transaction fees to unprecedented levels. However, the frenzy subsided quickly, and fees returned to lower levels soon after.
As of now, transaction fees make up 35% of total miner revenue, with the latter hovering around $50 million. This represents a 35% decline from the record-high revenue levels of $78 million before the halving. Data from YCharts indicates a drop in Bitcoin transaction fees from $80 million on April 20 to $6 million. Despite fees stabilizing around $16 million over the past week, the decrease in revenue is a growing concern for miners.
With lower transaction fees and the struggle of BTC to surpass $64,000, miners are facing tough times. The halving has impacted their income, as block rewards have been cut in half. The combination of reduced revenue and increased operational costs may force some miners to exit the market if the situation does not improve soon.
It is still early to determine the long-term effects of the halving on the network hashrate, as miners are maintaining operations at pre-halving levels for now. The current Bitcoin network hashrate is at 617 EH/s, while the hashprice has dropped to $0.07 per TH/s, the lowest since October. The sustainability of mining operations in the face of declining revenue remains a key concern for the cryptocurrency community.
