Bitcoin transfer costs fall to 2020 lows

Arijit Sarkar47 minutes agoBitcoin transfer costs fall to 2020 lowsBitcoin transaction fees hit a four-year low on July 7, falling to $38.69. Miners remain profitable due to reduced network difficulty and lower computational power needs.427 Total views4 Total sharesListen to article 0:00NewsOwn this piece of crypto historyCollect this article as NFTJoin us on social networksThe average fees associated with each Bitcoin transaction fell to their lowest level in four years on July 7 at $38.69, a figure last seen at the peak of the COVID-19 pandemic in 2020. 

The cost per Bitcoin (BTC) transaction for the day is determined by the miners’ revenue and the total number of transactions processed. On July 7, Bitcoin was trading above $58,200 when transaction costs came down due to two key factors: lower demand for block space and data volume.Cost per Bitcoin transaction, 1-day average. Source:Blockchain.comBitcoin miners maintain profitability amid lower fees

Bitcoin miners processed 673,752 transactions over the Bitcoin network on July 7, according to Ycharts data. BTC represented 89.7% of the transactions, and the rest of the bandwidth was taken up by other protocols, such as Ordinals (0.7%), BRC-20 (4.1%) and Runes (5.4%).Share of transactions on the Bitcoin network. Source:Dune Analytics

Bitcoin miner revenue for the day represented 1.14% of the transaction volume, an average share over the past six months. Despite lower average transaction costs, miners benefitted from reduced network difficulty, which allowed them to process transactions using comparatively lesser computational power.

Related:Bitcoin transaction value hits yearly high with $25B movedDialing down mining operations

Reading into the turbulent crypto market, market intelligence firm CryptoQuant said Bitcoin miners are showing signs of “capitulation” as profit margins tighten in the post-halving climate and BTC price falls close to $50,000.

Miner capitulation is the process of reducing operational costs or selling a portion of Bitcoin earnings to stay afloat during uncertain market conditions.Bitcoin mining hashrate. Source: CryptoQuant

CryptoQuant analysts highlighted multiple signs of capitulation that emerged over the last month, one of which was the significant decline 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 noted that miners have been “extremely underpaid,” as evidenced by the miner profit/loss sustainability indicator for most of the period since the halving, as shown below.Bitcoin miner profit/loss sustainability. Source: CryptoQuant

As a result, miners have seen a 63% decline in daily revenues since the halving when Bitcoin’s base block rewards and transaction fee revenue were higher.

Magazine:‘Raider’ investors are looting DAOs — Nouns and Aragon share lessons learned# Bitcoin# Cryptocurrencies# Mining# Transactions# Adoption# Bitcoin Mining# Fees# earnAdd reaction