Bitcoin fights to sustain its bull run while fees slide 56% YTD

Bitcoin's On-Chain Contradiction

Bitcoin's blockchain is experiencing a period of unusual quiet efficiency, even as its price struggles to maintain momentum above $110,000. This creates a stark contrast between on-chain activity and market performance.

• Fees have plummeted 56% since the start of the year, dropping from roughly 4.7 BTC to just over 2 BTC per day.
• The fee-to-reward ratio for miners has slipped from 1.35% in Q1 to 0.78%, indicating a reduced share of income from user transactions.
• Average block size has decreased by about 10%, and mempool congestion has largely disappeared.

A Shift in Network Dynamics

This on-chain lull has practical benefits, creating a low-latency settlement network with cheaper, faster transactions for traders, ETFs, and individual users. However, it also signals a structural shift. The historical correlation between rising prices and busier networks has been negative this year, suggesting that trading activity has moved off-chain to exchanges and custodians.

Implications for Miners and Security

For miners, this trend introduces risk. The decline in fee revenue means there is a thinner buffer against falling prices. The network's security becomes more directly leveraged to the spot price of Bitcoin, as miners rely more on the fixed block subsidy. If the price drops below $100,000, miner revenues could compress sharply.

Despite these pressures, the current state offers a stable and predictable network. This efficiency could mark a new equilibrium for Bitcoin as an institutional-scale asset. However, this quiet phase remains dependent on demand; a resurgence in retail activity or inscriptions could quickly return fee levels to their previous highs.