- Bitcoin daily transactions have plummeted to around 400,000, marking the lowest level since March 2024.
- Transaction fees have dropped below $1, reducing miner revenue to an average of $2,000 per block.
- Bitcoin’s price fell under $100,000 after new U.S. tariffs triggered market uncertainty and retaliatory economic measures.
Daily Bitcoin transaction activity has hit the most minimal level since this past year began. CryptoQuant data shows that the daily transaction volume reached 400,000 during the previous two months. The transaction numbers have dropped dramatically from 810,850 transactions which were recorded on November 19, 2024.
Declining Transactions Reduce Mempool Usage
Network transactions decreasing at a substantial level has produced major reductions throughout the Bitcoin mempool. Unconfirmed transactions stored in the mempool have reduced their utilization since more people use Bitcoin. Pending transactions currently exist at approximately 10,000 rates while the December 2024 count reached 250,000 unconfirmed transactions.
Lower transaction volumes have resulted in many Bitcoin blocks being mined without reaching full capacity. A notable example is Block 881931, which contained just 31 transactions and had a size of only 25.35 kilobytes. Typically, a Bitcoin block includes over 2,000 transactions, making this case an extreme deviation from the norm.
Transaction Fees Drop Below $1, Impacting Miners
The decline in transaction volume has led to lower fees, making Bitcoin transfers more affordable. According to mempool data, transaction fees fell to as low as 1 sat/vB ($0.14) before rising slightly to 3 sat/vB ($0.42). While this benefits users, it poses a challenge for miners who depend on transaction fees for revenue.
With network activity slowing, miners are earning significantly less from fees, averaging around $2,000 per block. This adds to the difficulties they have faced since the 2024 Bitcoin halving, which reduced mining rewards to 3.125 BTC. Initially, the launch of the Runes protocol led to a surge in miner revenue, but as interest in Runes and BRC-20 tokens fades, miners are left relying primarily on block rewards.
The value of Bitcoin has been unable to bounce back after the halving event occurred. The Bitcoin price fell past $100,000 due to U.S President Donald Trump enforcing trade tariffs against Mexico, Canada, and China. The U.S. federal government enforced a 10% increase in China import tariffs and applied a 25% tariff to produce from Canada and Mexico. The Canadian government imposed 25% trade barriers on select products coming from the U.S. as a retaliation and China and Mexico expressed plans to take similar retaliatory actions.
The impact of these economic policies has extended to Bitcoin mining profitability. Bitcoin’s hash price has fallen to $58.46, further straining miners already dealing with high difficulty levels and reduced rewards.
