Bitcoin Transaction fees reached a four-year low on July 7, dropping to $38.69. Miners continue to generate profits due to the decreased computational power requirements.
On July 7, the average fees associated with each Bitcoin transaction reached their lowest point in four years, at $38.69. This figure was last observed at the height of the COVID-19 pandemic 2020.
The revenue of the miners and the total number of transactions processed determine the cost per Bitcoin transaction for the day. As a result of two critical factors, decreased demand for block space and data volume, transaction costs decreased on July 7, when Bitcoin was trading above $58,200.
Bitcoin miners continue to generate profits Despite decreased fees
According to data from Ycharts, Bitcoin miners executed 673,752 transactions over the Bitcoin network on July 7. BTC accounted for 89.7% of the transactions, while the remaining bandwidth was allocated to other protocols, including Ordinals (0.7%), BRC-20 (4.1%), and Runes (5.4%).
The average proportion of Bitcoin miner revenue over the past six months was 1.14% of the daily transaction volume. Miners could process transactions with a comparatively lower computational capacity due to the reduced network difficulty despite the lower average transaction costs.
Reduced mining operations
CryptoQuant, a market intelligence firm, has reported that Bitcoin miners are exhibiting signs of “capitulation” as profit margins constrict in the post-halving climate and the price of BTC continues to decline, approaching $50,000.
Miner capitulation is reducing operational costs or selling a portion of Bitcoin earnings to maintain financial stability during uncertain market conditions.
CryptoQuant analysts identified numerous indications of capitulation that transpired over the past month, including the substantial decrease 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 demonstrated by the miner profit/loss sustainability indicator for most of the period since the halving, as illustrated below.
Miners had experienced a 63% decrease in daily revenues since the halving when Bitcoin’s essential block rewards and transaction fee revenue were higher.
