The fourth Bitcoin halving event has significantly cut down miners’ rewards by 50%. However, the surge in the dApp activity on the Bitcoin blockchain has provided miners enough relief in terms of revenue contribution.
Bitcoin Miners See Boost In Revenue Streams
Ki Young Ju, CEO of CryptoQuant, highlighted a significant shift in miners’ income streams due to the development of applications on the Bitcoin network. According to Ju, transaction fees now contribute to over 7% of miners’ total revenue, a notable increase from 1% observed two years ago. This trend has persisted for the past four weeks and is anticipated to bolster the network’s fundamentals moving forward.
Building apps on #Bitcoin has significantly changed miners’ income streams.
Transaction fees now account for over 7% of their total revenue, up from 1% two years ago.
This trend has persisted for the last four weeks and could potentially strengthen the network’s fundamentals. pic.twitter.com/YVbdmLXB5c
— Ki Young Ju (@ki_young_ju) May 7, 2024
The increasing transaction fee revenue can be attributed to innovative token protocols such as Ordinals and Runes, which have enhanced Bitcoin’s utility. These advancements facilitate the creation of both non-fungible and fungible tokens on the network, consequently leading to a rise in transaction volume.
Bitcoin Miner revenue consists of fixed block subsidies and transaction fees paid by users. With programmed halving events, block rewards decrease. However, as transaction fees become a larger portion of revenue, they could potentially compensate for diminishing profit margins following each halving.
BTC Miners Feel The Heat
The day following the halving, transaction fees totaling over $80 million contributed to bolstering miner revenue. At the peak of runes activity, the average transaction fee on the network surged to $40, but it has since decreased to under $10 as Bitcoin network activity returns to normal.
However, with fees reverting to typical levels, total miner revenue from transaction costs has fallen below $5 million, placing pressure on miners. The 7-day moving average of Bitcoin miner revenue per terahashes per second (TH/s) has plummeted to $0.048, marking an all-time low.
On the other hand, Bitcoin mining companies continue to rejoice on Wall Street. Amid the current bounce back on Wall Street, stocks of Bitcoin mining companies have also rallied in recent times. On the other hand, top Bitcoin mining players like Marathon Digital have been making key changes to boost the mining activity and expand their market share.
The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.
