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On July 7, the average cost per Bitcoin (BTC) transaction fell to its lowest level in four years, reaching $38.69, according to Blockchain.com.
This figure was last seen during the peak of the COVID-19 pandemic in 2020. The cost per transaction, calculated by dividing miners’ revenue by the total number of transactions processed, dropped despite Bitcoin trading above $58,200 on that day.
Two key factors contributed to this decrease: lower demand for block space and reduced data volume. On July 7, Bitcoin miners processed 673,752 transactions over the network. BTC transactions represented 89.7% of this total, with the remaining bandwidth used by other protocols like Ordinals, BRC-20, and Runes.
Miner Profitability and Network Dynamics
Despite the lower cost per transaction, Bitcoin miners maintained profitability. Miners benefited from reduced network difficulty, allowing them to process transactions using comparatively less computational power.
However, market intelligence firm CryptoQuant recently noted signs of miner capitulation as profit margins tighten in the post-halving environment and BTC prices approach $50,000. This capitulation involves miners reducing operational costs or selling portions of their Bitcoin earnings to remain viable during uncertain market conditions. A representative said:
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.
CryptoQuant highlighted several indicators of miner stress, including a significant decline in Bitcoin’s hashrate and miners being “extremely underpaid” according to the miner profit/loss sustainability indicator. Daily miner revenues have seen a substantial decline since the halving when both base block rewards and transaction fee revenue were higher.
These trends suggest evolving challenges for Bitcoin miners as they adapt to changing market dynamics. The situation warrants close observation as it could have broader implications for the cryptocurrency ecosystem. The CryptoQuant representative added:
Total daily revenues have decreased from $79M on March 6 to $29M currently. Moreover, the revenue from transaction fees has fallen to only 3.2% of the total daily revenues, the lowest share since April 8.
