The Bitcoin network is facing a downturn in both transactions and fees as the halving approaches. Data from Feb. 17, 2024, indicates that bitcoin miners processed 327,713 transactions over a 24-hour timeframe. This is a stark contrast to the 636,523 transfers on Jan . 28, 2024. The volume of daily transactions on the Bitcoin network has seen a significant decline since then, with numbers falling from peaks above 600,000 to below 300,000 transactions per day. Despite the downturn, miners have still managed to collect over $816 million this month, with more than $47 million coming from on-chain transaction fees. This shift in Bitcoin’s transaction landscape, characterized by a notable decrease in daily activity and fees, signals a potential recalibration within the network’s economy.
Network Activity Slows on Bitcoin as Ordinal Inscriptions Dip
The Bitcoin network passed block 800,000 on Monday, marking another major milestone in the history of the world’s largest cryptocurrency. This is indeed a key milestone on the path to the next halving, and it certainly adds a layer of excitement to the already vibrant ecosystem,” Matt Prusak, Chief Commercial Officer at Miami-based Bitcoin mining company US Bitcoin Corp told Decrypt. This support may be crucial as they face the prospect of their revenues being slashed by half in April.
From that point, a gradual decrease in transaction volume has been observed, reaching a monthly low of 278,098 transactions on Feb 6. The month of February has experienced a noticeable dip in daily transaction activity, a stark contrast to the 636,523 transfers recorded on Jan. 28. This downturn is in sync with a decrease in the daily creation of Ordinal inscriptions, overall easing congestion and reducing on-chain fees.
Bitcoin Halving Is Less Than 40,000 Blocks Away—Here’s What That Means
Meanwhile, Bitcoin mining difficulty—another key metric measuring how challenging it is to find a new block—hit a new all-time high at the most recent adjustment about two weeks ago. This will only rise into the halving, reaching all-time highs as miners push to get miners online,” Harvey told Decrypt. We are at the precipice of what could be another transformative period in the life of Bitcoin, one we eagerly look forward to navigating,” Prusak said.
Many industry players have offline equipment in warehouses, and are now scrambling to secure partners or facilities to house them,” the Sabre56 CEO told Decrypt. However, with difficulty and hash power increasing, miners are now between a 30-50% margin at operations run at hosting costs of $0.07 – $0.05 per kWh.
Bitcoin ‘Stronger’ Ahead of Halving: Grayscale
The funds have only been on the market for less than one month but have already attracted billions of dollars from investors looking to gain exposure to bitcoin without having to buy and store it directly. This shows that Bitcoin is now stronger than ever before, and it is poised to rise even more after the halving.
What do you think about the reduced activity the Bitcoin network has seen in recent times? Share your thoughts and opinions about this subject in the comments section below. As always, participants should proceed with caution, mindful of the risks associated with such periods of uncertainty.
Conclusion
The Bitcoin network is experiencing a downturn in both transactions and fees as the halving approaches. Despite this, miners have still managed to collect over $816 million this month, with more than $47 million coming from onchain transaction fees. This is a sign that the Bitcoin network is still strong and is poised to rise even more after the halving. With the 800,000th block mined, we are now closer than ever to halving, an event that will bring about a transformation in the life of Bitcoin.