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. According to Crypto Fees, Bitcoin miners earned $7.47 million in fees on April 17, which is about $160,000 more than the $7.31 million paid to Ethereum stakers. On April 15 and 16, Bitcoin miners also 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 still maintains a slightly higher 7-day average fee 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. 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 ($398,000) to 3.125 BTC ($199,000). Currently, around 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 in the Bitcoin mining industry. However, after the halving event, the share of block rewards from transaction fees will significantly increase as only around 450 Bitcoin will be mined. Miners will therefore rely more on higher fees and a potential increase in Bitcoin’s price to compensate for the revenue loss resulting from the halving, at least in the short term.
Additionally, the introduction of NFT-like Ordinals inscriptions in January 2023 has contributed to an increase in revenue from transaction fees for Bitcoin miners. Another revenue stream will be available when Runes, a new Bitcoin token standard, is released during the halving at block 840,000. 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, believes that Runes, being fully UTXO-based, will not spam Bitcoin to the same extent as Ordinals.
The recent rise in Bitcoin fees may have been influenced by a decline in BRC-20 token prices in recent days as some traders shift their attention to Runes. The two largest BRC-20 tokens, Ordinals (ORDI) and Sats (SATS), have seen drops of 38% and 43% respectively over the past week, according to CoinMarketCap.