Bitcoin fees have exceeded Ethereum fees for three consecutive days as miners and traders prepare for the upcoming Bitcoin halving and the introduction of Runes on Bitcoin. On April 17, Bitcoin miners earned $7.47 million in fees, slightly more than the $7.31 million earned by Ethereum stakers, according to Crypto Fees. On April 15 and 16, Bitcoin miners earned $9.98 million and $5.91 million respectively, surpassing Ethereum stakers by $3.5 million and $1.1 million on those days. However, Ethereum maintains a narrow lead on a 7-day average fee basis, with $8.55 million compared to Bitcoin’s $7.57 million.
Bitcoin transaction fees are determined by the size 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 result in a reduction of 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. Based on the $7.47 million fee count on April 17, transaction fees accounted for 11.5% of the total block rewards for the Bitcoin mining industry. However, after the halving event, the share of block rewards from transaction fees will increase significantly as only about 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 fall resulting from the halving, at least in the short term.
In addition, the introduction of NFT-like Ordinals inscriptions in January 2023 has helped Bitcoin miners generate more revenue from transaction fees. Another revenue stream will become available with the release of Runes, a new Bitcoin token standard, at block 840,000 during the halving. Runes will compete with Ordinals by making it easier to create fungible tokens on Bitcoin for memecoin enthusiasts and other community-driven audiences. Its creator, Casey Rodarmor, who also invented Ordinals, claims that Runes are fully UTXO-based and should not spam Bitcoin to the same extent as Ordinals.
The recent increase in Bitcoin fees may have been partly driven by a decline in BRC-20 token prices in recent days as some traders shift their attention to Runes. The two largest BRC-20s, Ordinals (ORDI) and Sats (SATS), have experienced declines of 38% and 43% respectively over the past week, according to CoinMarketCap.