Bitcoin Transfer Fees Drop to 2020 Lows
10 Jul, 2024 ● Coin news
The average fees for Bitcoin transactions dropped to $38.69 on July 7, marking the lowest level in four years, last observed during the peak of the COVID-19 pandemic in 2020.
The cost per Bitcoin transaction on a given day is calculated based on miners' revenue and the total number of processed transactions.
On July 7, Bitcoin was trading above $58,200 when transaction coss decreased due to two main factors: reduced demand for block space and lower data volume.
According to Ycharts data, Bitcoin miners processed 673,752 transactions over the Bitcoin network on July 7.
BTC accounted for 89.7% of these transactions, while other protocols, including Ordinals (0.7%), BRC-20 (4.1%), and Runes (5.4%), made up the remainder.
Bitcoin miner revenue for the day was 1.14% of the transaction volume, aligning with the average share over the past six months.
Despite the lower average transaction costs, miners benefitted from reduced network difficulty, which allowed for transaction processing with less computational power.
Amid the fluctuating crypto market, CryptoQuant, a market intelligence firm, noted that Bitcoin miners are showing signs of "capitulation" as profit margins tighten in the post-halving environment and BTC prices approach $50,000.
Miner capitulation involves reducing operational costs or selling a portion of Bitcoin earnings to remain viable during uncertain market conditions.
CryptoQuant analysts pointed out several signs of capitulation that appeared over the last month, one of which was the notable decline in Bitcoin’s hashrate.
"Bitcoin Miner capitulation mirrors December 2022 levels with a 7.7% hashrate drop, similar to post-FTX collapse conditions. Such declines often signal potential market bottoms."
The CryptoQuant report also observed that miners have been "extremely underpaid," as indicated by the miner profit/loss sustainability indicator for most of the period since the halving.
As a result, miners have experienced a 63% decline in daily revenues since the halving when Bitcoin’s base block rewards and transaction fee revenue were higher.
Sources:
https://cointelegraph.com/news/bitcoin-transaction-fees-lowest-2020
