After the recent Bitcoin halving, transaction costs have fallen significantly, a trend break from the initial spike in costs immediately after the event.
Significant decrease in transaction costs
Immediately after Bitcoin’s halving, transaction fees skyrocketed to $146 for a medium priority transaction and $170 for a high priority transaction. Recently, data from Mempool.space shows that the cost of an average priority transaction has dropped to $8.48, while the cost of a high priority transaction is now $9.32. This decline follows a period where Bitcoin traded steady above $65,800.
Impact on the NFT market and miners
The introduction of Casey Rodarmor’s Runes Protocol to coincide with the halving aimed to create fungible tokens on Bitcoin and thus support transaction fee revenue. However, in the days following the launch, the floor price of the Runestone NFT collection has almost halved, with a current floor price of almost 0.037 BTC, according to Magic Eden. At the same time, data from CoinGecko shows that ordinals collections such as Bitcoin Puppets and NodeMonkes have experienced increases of 11% and 8% respectively.
It is important to note that these ordinal collections also generate significant transaction fees, but they do not appear to provide the same source of revenue that was hoped for with the Runes Protocol. The hash price index, a metric created by Luxor to quantify how much a miner can earn from a given amount of hashing power, has also fallen from $182.98 per hash/day to $81, a level lower than before the halving.
Bitcoin’s halving has led to significant changes in both transaction fees and dynamics within the NFT market. Although miners had expected significant drops in income, the recent stabilization of transaction costs and activity on the blockchain offers new prospects for both investors and market participants.
