Bitcoin transaction fees plummet after halving event
Bitcoin (BTC) started the week on a stable note, trading above $65,800, as transaction fees have significantly decreased following the recent halving event.
This reduction in fees is a stark contrast to the initial aftermath of the halving when medium-priority transactions spiked to over $146, and high-priority transactions reached $170.
According to on-chain data from Mempool.Space, medium-priority transactions are now costing $8.48, while high-priority transactions cost $9.32. This is a significant drop from the fees seen immediately after the halving.
The hashprice index, a metric created by Luxor to quantify how much a miner can expect to earn from a specific quantity of hashrate, has also experienced a decline. It has dropped from $182.98 per hash/day to $81, which is below the pre-halving level.
Bitcoin miners had anticipated that the halving would significantly impact their revenue. To counteract this, the Runes protocol, designed by Casey Rodarmor to create fungible tokens on Bitcoin, went live at the time of the halving. The protocol was expected to generate significant on-chain activity, potentially offsetting the revenue loss for miners.
However, in the days following the halving, the floor prices for the runestone NFT collection have dropped by nearly 50% in the last 24 hours, with a floor price of around 0.037 BTC, according to Magic Eden. On the other hand, ordinal collections like Bitcoin Pullets and NodeMonkes have seen increases of 11% and 8%, respectively, as per CoinGecko data.
It is important to note that while these ordinal collections generate considerable transaction fees, they do not appear to be the same level of revenue source that many had hoped the Runes protocol would be for miners.
The development follows crypto miners stockpiling near-record amounts of Bitcoin, hoping the token will rise in value and offset a drop in new supply that will cut the rewards for verifying transactions in half. The Bitcoin mining industry was also in the spotlight in mid-March, when President Joe Biden’s proposed 30% tax on crypto mining power faced criticism for potentially harming the industry and erasing investor wealth.
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