In short, Bitcoin miners are under acute financial stress. In June, transaction fees fell to a three-year low, accounting for under 1% of total block rewards. This overall downward trend as well as the recent halving event are all taking a toll on miner profitability. After dipping below $75,000 in April—thanks in part to President Trump’s tariff announcements—bitcoin has recovered to $104,648. The catch for miners is decreased revenue sources, particularly for those operating with high OPEX.

Impact of Low Transaction Fees

>Bitcoin transaction fees have been quite minimal this year and last, often under $1.50. While transaction fees are entirely predictable and stable, they do have brief spikes during periods of high activity on the Bitcoin network. The general trend has been a decline, which has affected those miners who depend on these fees as a more significant share of their revenues.

Bitcoin miners earn block rewards, which incentivize them to process transactional data contained in blocks and add these blocks to the blockchain. Today, miners receive 3.125 BTC for each block they successfully mine. In fact, that amount is over $327,000 today, not counting transaction fees they rake in.

Halving's Effect on Mining Rewards

In addition, the Bitcoin halving, which happens roughly every four years, cuts the rewards miners receive in half. That last halving occurred in April 2024, cutting reward per block from 6.25 BTC to 3.125 BTC. This shift places extra pressure on miners that makes transaction fees an increasingly important part of their income.

The lower block reward forces miners to depend more and more on transaction fees in order to be profitable. Additionally, fees are at historic lows, potentially making it difficult for some miners to make their operational expenses. In conclusion, sellers will likely be motivated to sell Bitcoin.

Strategies for Miner Survival

According to some experts, good operations can help avoid the challenges and do enough to overcome the negative effects of low transaction fees.

"Bitcoin mining profitability has always hinged more on cost structure than Bitcoin's price." - Mihir Bhangley

For Bhangley, the most cost-effective miners will have a stronger competitive nature in the face of market volatility.

"ensures long-term, resilient returns, regardless of market cycles." - Mihir Bhangley

Following these economic shocks, the Bitcoin network has faced dramatic increases in transaction activity. This increase is largely due to speculative trends such as Bitcoin Ordinals which utilize blockchain space to create NFT-type assets. Despite these trends providing a short-term boost to transaction fees, their long-term effect on miners’ revenue is unclear. Square CEO Jack Dorsey has been a vigorous proponent of the wider adoption of Bitcoin and other cryptocurrencies for everyday transactions. This change would dramatically boost miners’ transaction fee revenue.