Bitcoin fees have exceeded Ethereum fees for three consecutive days as miners and traders prepare for the Bitcoin halving and the introduction of Runes. On April 17, Bitcoin miners earned $7.47 million in fees, surpassing the $7.31 million paid to Ethereum stakers. They also earned $9.98 million and $5.91 million on April 15 and 16 respectively, beating out Ethereum stakers by $3.5 million and $1.1 million on those days. However, Ethereum still maintains a narrow lead on a 7-day average fee basis at $8.55 million compared to Bitcoin’s $7.57 million.
Bitcoin transaction fees are determined by the size or data volume of the transaction and the demand for blockspace at the time of the transaction request. The increase in Bitcoin fees comes at a crucial time for miners as the Bitcoin halving event on April 20 will reduce the mining subsidy from 6.25 BTC to 3.125 BTC. Currently, about 900 Bitcoin are mined per day, equivalent to approximately $57.2 million at current prices. With transaction fees accounting for 11.5% of the total block rewards, this share is expected to increase significantly after the halving event when approximately 450 Bitcoin will be mined per day.
Miners will therefore rely more on higher fees and an increase in Bitcoin’s price to compensate for the revenue loss resulting from the halving. Additionally, the introduction of Runes, a new Bitcoin token standard, will provide a new revenue stream for miners when it is released at block 840,000. Runes will compete with Ordinals, which were introduced in January 2023, and aim to make it easier to create fungible tokens on Bitcoin for memecoin enthusiasts and other community-driven audiences. The creator of Runes, Casey Rodarmor, believes that Runes will not spam Bitcoin to the same extent as Ordinals because it is fully UTXO-based.
The recent increase in Bitcoin fees may have been influenced by a decline in BRC-20 token prices, as some trader attention shifts to Runes. The two largest BRC-20 tokens, Ordinals and Sats, have seen a decrease of 38% and 43% respectively over the past week. This shift in attention towards Runes and the potential revenue it can generate from transaction fees highlights the growing interest in cryptocurrency and its various applications.