Bitcoin fee earnings for miners drop by 90% from BRC-20 peak

  • The revenue earned by Bitcoin miners from fees has dropped by 90% since the peak of the BRC-20 frenzy, going from $17.8 million per day to $1.7 million per day as of May 29, 2023.
  • However, these current levels remain within historical levels, as only 310 out of 4,674 trading days have seen greater fees.
  • In 2018, transaction fees were higher than recent highs only on two trading days.

The decline in Bitcoin miner revenue from transaction fees has been substantial since the BRC-20 frenzy that drove network activity higher earlier in the month.

Bitcoin mining is a crucial part of the flagship cryptocurrency’s network operations, and miners earn from the set subsidy as well as transaction fees. BRC-20 tokens are a type of fungible tokens created on the Bitcoin blockchain. They are ordinal inscriptions that can represent a variety of things, including digital assets and loyalty points.

Miner revenue from fees falls sharply after BRC-20 frenzy

According to data from Glassnode, a leading on-chain and financial markets data platform, miners were earning roughly $17.8 million from transaction fees per day. This happened as Bitcoin price traded near the YTD highs and as the BRC-20 craze hit the industry.

However, as of May 29, 2023, the earnings had declined considerably and miners were taking home just $1.7 million from network fees per day.

Miner earnings from fees have thus fallen by about $16.1 million, or 90.85% from that recent peak, as highlighted by Glassnode on Monday.

But as the platform noted, miners’ revenues from fees dropping to latest levels still sees the figures near historical ones seen in most trading days. Only 310 out of 4,674 days, or 6.7% of BTC trading days have seen higher miner revenue from fees.

Glassnode noted:

“At the peak of the BRC-20 frenzy, Bitcoin miners were earning $17.8M in transaction fees, with only 2 trading days across the 2018 peak recording a larger fee revenue. Currently, miners are earning $1.7M in fee revenue, a -$16.1M decline from the recent peak. However, this remains significantly elevated when compared to historical precedence, with only 310 / 4674 (6.7%) trading days recording greater fees.”

The Bitcoin network recently experienced a significant surge in activity as the demand for BRC-20 tokens soared. The result was network congestion as the rush to inscriptions helped fees to spike to year-to-date highs. This proved to be a profitable season for miners, as Glassnode data shows.

In 2018, when Bitcoin fees also significantly spiked, only two trading days had recorded transaction fees higher than the $17.8 million miners earned recently.

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