Transaction fees on the Bitcoin network have continued to decline months after its latest peak during the halving event.
Data from IntoTheBlock shows that fees on the leading crypto network have decreased by 18% this week after dropping 27% from the previous one. The continuous decline has placed Bitcoin fees at their lowest since November 2023.
Bitcoin Fees Are Declining
Three months ago, Bitcoin recorded the highest transaction fees among all protocols, including Ethereum. For a few days before the last Bitcoin halving event, the network’s fees consecutively surpassed all the others as activity surged.
One of the major drivers of the surge in transaction fees at the time was the launch of the Runes protocol, which eventually took place on the halving day. Runes enable the issuance and transfer of fungible tokens on the network, and the combination of this new development with the already existing Ordinals protocol, which introduced Bitcoin non-fungible tokens, ramped up activity and, in turn, fees.
However, transaction fees came tumbling a few days after the halving, plunging to 35% of Bitcoin miner revenue from the 75% recorded before the event. On the halving day, daily Bitcoin fees surged to a new all-time high of $80 million, but at the time of writing, the network recorded less than $6 million in fees weekly.
Data from mempool.space showed that the average cost of a Bitcoin transaction is roughly 5 sats/vByte worth $0.0029, a far cry from the 90 sats/vByte ($8.50) recorded in mid-April. In addition, information on YCharts reveals that Bitcoin is currently amassing less than $1 million in transaction fees daily. In fact, the last time the network recorded $1 million in transaction fees was on July 3; on July 11, the fees amounted to $721,599.
BTC Poised for a Rally?
The plunge in Bitcoin transaction fees can be attributed to several factors, mainly the decline in network activity, which somewhat correlates with the border market drawdown. Bitcoin has experienced a significant decline in value over the past few weeks, so much so that its price dropped to a level not seen since late February.
Since the major propeller of the drawdown, the supply overhang from German authorities will soon ease off, bitcoin may be poised for a rally soon. It remains to be seen if the network’s transaction fees will follow suit.
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