BTC transaction costs recently hit a four-year low (below $38), not seen since 2020. Nevertheless, miners remain profitable thanks to lower computing power requirements.
Bitcoin miners remain profitable despite lower fees
The bearish sentiment was caused by significant drops in the bitcoin price. All this was caused by the selling passion of the German government, which decided to resell its bitcoins. The king of cryptocurrencies is slowly climbing back towards USD 60,000. However, such large drops also have their advantages. The first advantage of the price dive is, of course, the possibility of buying BTC at a promotional price. The second advantage is the record low BTC transaction costs. Such low levels have not been seen since 2020, i.e. since the COVID-19 coronavirus pandemic. The minimum transaction record not seen in 4 years was set on July 7, when BTC transaction costs fell below USD 38.69.
Interestingly, on that day (July 7), Bitcoin miners processed 673,752 transactions on the Bitcoin network, according to Ycharts data. BTC accounted for 89.7% of transactions, with the rest being taken up by other protocols such as Ordinals (0.7%), BRC-20 (4.1%), and Runes (5.4%). It’s worth noting that despite lower average transaction costs, miners benefited from reduced network load, which allowed them to process transactions using relatively less computing power.
Significant reduction in mining operations – is a bear market fast approaching?
Bitcoin miners are showing signs of “capitulation,” according to CryptoQuant, a digital asset market analyst. The company noted that these signs are seen in direct proportion to the diminishing returns in a post-halving climate, with BTC nevertheless falling close to the $50,000 level. As CryptoQuant notes:
Bitcoin miner capitulation mirrors December 2022 levels with a 7.7% hashrate drop, similar to what happened after the FTX collapse. Such drops often signal potential market bottoms.
CryptoQuant analysts have highlighted the many signs of capitulation that have emerged over the past month. One of the more significant signs is the decline in the BTC hashrate. Will BTC manage to climb back up to the $70,000 area? Some analysts have no doubts about the feasibility of such a scenario, predicting $100,000 per BTC by the end of the year.
