Bitcoin Transfer Costs Reach 2020 Lows

Bitcoin transaction fees hit a four-year low on July 7, dropping to $38.69. This decrease is attributed to reduced network difficulty and lower computational power requirements for miners.

Key Points:

• Bitcoin transaction fees hit a four-year low on July 7 at $38.69.
• Miners remain profitable due to reduced network difficulty and lower computational power needs.

The average cost per Bitcoin transaction dropped to $38.69 on July 7, the lowest since 2020. This decrease is linked to the miners’ revenue and total transaction volume processed.

On July 7, with Bitcoin trading above $58,200, lower demand for block space and reduced data volume contributed to the decline in transaction costs.

Bitcoin Miners Sustain Profitability Despite Lower Fees

Bitcoin miners processed 673,752 transactions on the Bitcoin network on July 7, with BTC accounting for 89.7% of the total transactions. Other protocols like Ordinals (0.7%), BRC-20 (4.1%), and Runes (5.4%) occupied the rest of the bandwidth.

Despite lower average transaction costs, miners benefited from decreased network difficulty, enabling them to process transactions with less computational power.

Adjusting Mining Operations

Crypto market intelligence firm CryptoQuant highlighted signs of miner “capitulation” as profit margins tighten in the post-halving environment and Bitcoin’s price approaches $50,000.

Miner capitulation involves reducing operational costs or selling a portion of Bitcoin earnings to cope with uncertain market conditions.

“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.”

Miners have seen a 63% decline in daily revenues since the halving when Bitcoin’s rewards and transaction fees were higher.