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Bitcoin Network Fees Plunge After Setting Record Highs

Record highs in Bitcoin fees and their rapid decline

On April 20, the day of the fourth Bitcoin halving, the average fees paid on Bitcoin transactions spiked to a record of $128, according to data from mempool.space. This peak was short-lived as fees dramatically dropped to between $8 and $10 for medium-priority transactions by the next day. 

During the halving event, Bitcoin miners, particularly those from ViaBTC, collected an impressive total of 37.7 BTC in fees, equivalent to about $2.4 million, from just the halving block alone. 

This block, number 840,000, also became the most coveted in Bitcoin’s 15-year history, with enthusiasts from various sectors, including memecoins and NFTs, vying to secure space using the newly launched Runes protocol. On this record-setting day, Bitcoin not only surpassed Ethereum in total daily fees by more than twenty-four times, reported by Crypto Fees, but also included 3,050 transactions in the halving block, averaging nearly $800 paid per user.

Market dynamics and impact on miners following the halving

While the halving initially seemed to mitigate the impact of reduced block rewards for miners, with fees per block reaching up to 2 BTC, the situation has since changed. The average fee has significantly decreased, reducing miners' compensation from fees to below the new block reward level of 3.125 BTC. This shift suggests that the high fees on halving day were an anomaly rather than a sustainable trend. 

Despite these challenges, Bitcoin continued to outpace Ethereum in terms of total transaction fees for six consecutive days leading up to April 20. The overall fee revenue for Bitcoin during this period was $17.8 million. Additionally, the halving event did not substantially affect Bitcoin's price, which has seen a slight increase of 1.5% to $64,790 since the event, per CoinGecko.