Bitcoin Miners Struggle as Rewards Shrink and Fees Plunge Post-Halving
The Bitcoin mining industry is under mounting pressure following the network's April 2024 halving, which reduced block subsidies from 6.25 BTC to 3.125 BTC.
Despite BTC’s spot price hovering near $95,000, miner revenues have not kept pace, with multiple indicators highlighting sharp contractions in profitability.
Declining Fee Contribution
One of the most notable shifts post-halving is the decline in transaction fees as a share of total miner revenue. Currently, fees account for just 1.48% of block rewards—one of the lowest ratios observed since early 2023. This drop reflects waning demand for on-chain block space.
Temporary fee spikes from events like the launch of Runes and activity surrounding Ordinals pushed average fees to $127 per transaction in April 2024. However, those spikes proved fleeting. Fee levels have since collapsed below $2, suggesting that transaction-based miner compensation is proving unsustainable.
Stagnant Hashprice Despite Price Rally
The hashprice—representing miner earnings per petahash per second (PH/s)—has failed to rise alongside Bitcoin’s surging spot price. As of late April 2025, hashprice stood at $48.9 per PH/s/day. This stagnation contrasts sharply with previous bull cycles, where hashprice typically surged with BTC’s value.
The current discrepancy has left many mining operations underwater. Mining rigs operating at 25–38 J/TH only generate around $0.06 per kWh—below the U.S. grid electricity average of $0.08. This implies negative margins for even moderately efficient miners, forcing smaller or higher-cost operators to consider powering down or upgrading hardware.
Broader Implications for Bitcoin’s Security Model
The reduced fee contribution and stagnant hashprice spotlight a broader concern about Bitcoin’s long-term security model. As block subsidies continue halving every four years, the network is expected to rely more heavily on transaction fees to incentivize miners. However, with off-chain solutions like the Lightning Network serving over 650 million indirectly connected users, on-chain activity appears increasingly insufficient to fill the revenue gap.
The sustainability of miner incentives—crucial to the network’s security—may depend on new innovations in layer 2 adoption, fee market mechanics, or even protocol-level changes.
Kosta Gushterov
Reporter at Coindoo
Kosta has been a part of the team since 2021 and has solidified his position with a thirst for knowledge, incredible dedication to his work and a “detective-like” mindset. He not only covers a wide range of trending topics, he also creates reviews, PR articles and educational content. His work has also been referenced by other news outlets.
