Bitcoin Fees Surpass Ethereum on Halving Anticipation and Introduction of Runes
Summary:
Bitcoin transaction fees have outpaced Ethereum for three consecutive days. Players in the space anticipate the upcoming Bitcoin halving, and the introduction of Runes on Bitcoin, leading to the miners cashing more than Ethereum stakers. However, on a 7-day average fee basis, Ethereum maintains a narrow lead over Bitcoin. The increase in Bitcoin fees comes ahead of a significant halving event that will reduce the mining subsidy, making miners rely more on higher fees. Moreover, the introduction of Runes, a new Bitcoin token standard, alongside the NFT-like Ordinals inscriptions, has also contributed to increasing revenue from transaction fees.
Bitcoin fee hauls have been exceeding those of Ethereum for three consecutive days due to miner and trader anticipation for the forthcoming Bitcoin halving event and the impending introduction of Runes on Bitcoin. On April 17, Bitcoin miners earned a total of $7.47 million in fees, roughly $160,000 more than the $7.31 million garnered by Ethereum stakers, as reported by Crypto Fees. Furthermore, Bitcoin miners also earned $9.98 million and $5.91 million on April 15 and April 16 respectively, surpassing Ethereum stakers by margins of $3.5 million and $1.1 million. Despite this, Ethereum maintains a slight edge over Bitcoin in terms of a 7-day average fee basis, with the former at $8.55 million compared to the latter's $7.57 million.
The costs associated with Bitcoin transactions are influenced by the data volume or size of the transaction and the demand for blockspace when the transaction request is made. This notable increase in Bitcoin (BTC) fees is especially significant for Bitcoin miners as the halving event slated for April 20 will cut the mining subsidy from 6.25 BTC ($398,000) to 3.125 BTC ($199,000).
At present, around 900 Bitcoin are being mined daily, amounting to an equivalent of approximately $57.2 million. With the fee earnings on April 17 amounting to $7.47 million, transaction fees make up 11.5% of total Bitcoin mining industry's block rewards. Following the halving event, the percentage of block rewards from fees will likely rise as an estimated 450 Bitcoin will be mined. As a result, miners will depend heavily on higher transaction fees and consistent increases in Bitcoin prices to offset revenue losses resulting from the halving.
The unveiling of NFT-like Ordinals inscriptions in January 2023 boosted Bitcoin miners' revenue from fees while the introduction of Runes, a new Bitcoin token standard, upon halving at block 840,000 will create yet another income stream. According to its inventor, Casey Rodarmor, Runes will be fully UTXO-based and as such, are less likely to inundate Bitcoin as Ordinals have been doing.
The decline in BRC-20 token prices in recent days, specifically as traders are becoming more interested in Runes, may have contributed to the increase in Bitcoin fees. Ordinals (ORDI) and Sats (SATS), the most sizable BRC-20s by market capitalization, have witnessed respective drops of 38% and 43% in the past week based on data from CoinMarketCap.
Published At
4/19/2024 3:35:06 AM
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