Bitcoin Fees Fall From Record Highs on Halving Day
22 Apr, 2024 ● Coin news
Bitcoin transaction fees experienced a dramatic drop, falling to an average of $8-$10 for medium-priority transactions just a day after they soared to a record $128 on April 20, coinciding with the fourth Bitcoin halving.
According to data from mempool.space, this stark reduction in fees comes after an unprecedented peak in fee payments.
On the day of the halving, Bitcoin transactions accrued a total of $78.3 million in fees, significantly outpacing Ethereum by more than 24 times, as reported by Crypto Fees.
The day was marked by the Bitcoin halving block at block height 840,000, which alone garnered 37.7 BTC ($2.4 million) in fees paid to the miner ViaBTC, making it the most lucrative single block in Bitcoin's 15-year history.
The extraordinary demand for space in block 840,000 was largely driven by participants in the memecoin and nonfungible token (NFT) sectors, who were utilizing the Runes protocol—a new token standard introduced at the halving.
This block included 3,050 transactions, averaging nearly $800 in fees per transaction.
The elevated fee levels persisted until about block 840,200. Afterward, fees normalized to around 1–2 BTC per block, according to mempool.space.
This return to lower fees suggests that the high fees were a temporary effect of the heightened activity and competition for block space surrounding the halving event.
Despite the halving event, which reduced the block subsidy from 6.25 BTC to 3.125 BTC, miners received substantial fee payouts on the day of the halving, which helped mitigate the immediate impact of the reduced block reward.
However, with fees now significantly lower than the 3.125 BTC subsidy, the ongoing compensation for miners has adjusted accordingly.
Interestingly, in the six days leading up to the halving (April 15-20), Bitcoin fees consistently surpassed those of Ethereum, with a seven-day average fee total of $17.8 million.
Despite the significant activities and adjustments around the halving, the price of Bitcoin has seen modest growth, up 1.5% since the event, with a current price of $64,840 as per CoinGecko.
This series of events underscores the dynamic nature of Bitcoin's network economics, especially during significant milestones like the halving, which can temporarily skew normal activity and fee structures.
Sources:
https://cointelegraph.com/news/bitcoin-fees-crash-after-daily-average-record-halving-day
https://ycharts.com/indicators/bitcoin_average_transaction_fee
