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The average transaction fees for each Bitcoin transaction fell to $38.69 on July 7, marking a four-year low; this figure was last seen during the peak of the COVID-19 pandemic in 2020. The cost per daily Bitcoin transaction is determined by miners’ revenue and the total number of transactions processed. On July 7, Bitcoin was trading above $58,200 when transaction costs dropped due to two main factors: decreased block space demand and data volume.
What Is Happening in the Bitcoin Ecosystem?
Ycharts data shows that Bitcoin miners conducted 673,752 transactions through the Bitcoin ecosystem on July 7. Bitcoin represented 89.7% of the transactions, with the remaining bandwidth used by other protocols like Ordinals (0.7%), BRC-20 (4.1%), and Runes (5.4%).
The daily revenue of Bitcoin miners represented 1.14% of the transaction volume, the average share over the past six months. Despite lower average transaction costs, miners benefited from reduced network difficulty, allowing them to process transactions with relatively less computational power.
Details on the Subject
Market data analysis firm CryptoQuant, examining the turbulent crypto market, noted that Bitcoin miners showed signs of capitulation due to narrowing profit margins and Bitcoin’s price approaching $50,000 in the post-halving environment. Miner capitulation is the process of reducing operational costs or selling a portion of Bitcoin earnings to survive uncertain market conditions.
CryptoQuant analysts highlighted several signs of capitulation that emerged last month, one of which was a significant drop in Bitcoin’s hashrate:
“Bitcoin Miner capitulation reflects December 2022 levels with a 7.7% hashrate drop, similar to post-FTX collapse conditions. Such drops often indicate potential market bottoms.”
CryptoQuant report also noted that miners have been excessively underpaid since the halving event, as shown by the miner profit/loss sustainability indicator.
As a result, miners have seen a 63% drop in their daily revenue since the halving event, where Bitcoin’s basic block rewards and transaction fee income were higher.
