Since January 28, 2024, the Bitcoin network has witnessed a notable decline in daily transaction volumes, plunging from peak levels surpassing 600,000 to below 300,000 transactions per day. This downturn correlates with a decrease in the daily creation of Ordinal inscriptions, alleviating congestion and resulting in reduced onchain fees.
Data reveals that bitcoin miners processed 327,713 transactions within a 24-hour period. The month of February has marked a distinct decrease in daily transaction activity, contrasting sharply with the 636,523 transfers recorded on January 28.
From that point onward, a gradual reduction in transaction volume has unfolded, hitting a monthly low of 278,098 transactions on February 6. This decline mirrors the diminished activity in Ordinal transactions throughout the month.
Following February 3, which witnessed the creation of just over 300,000 inscriptions in a single day, a noticeable downturn in the number of inscriptions has been observed. Three days later, the count plummeted to a mere 35,814 inscriptions for the day.
This reduction in inscriptions has translated into fewer transactions, alleviating the fees miners previously enjoyed in December 2023 and January 2024 due to the surge in demand for block space. Mempool congestion has seen relief this month, with unconfirmed transactions dropping from over 200,000 before February 9 to the current figure of 139,625.
Consequently, the average transaction fee has witnessed a significant decrease from the February 3 peak of $14.81 to the current $4.56 per transaction or 27 satoshis per virtual byte. The median BTC transaction fee has also declined, moving from $4.16 per transaction to today’s rate of $1.75 or 10.4 satoshis per virtual byte.
Despite the downturn, miners have managed to amass over $816 million this month, with more than $47 million coming from onchain transaction fees. The hash price, estimating the daily value of one petahash per second (PH/s) of hashing power, has decreased from a February 14 peak of $92 to the current $82 per PH/s.
This shift in Bitcoin’s transaction landscape, characterized by a significant decrease in daily activity and fees, indicates a potential recalibration within the network’s economy. As miners adapt to lower earnings and users benefit from reduced fees, the ecosystem may be entering a phase of stabilization.
With fewer than 9,000 blocks remaining until Bitcoin’s fourth halving event, the rise in Ordinal inscriptions, heightened demand for block space, and increased fees have become crucial factors in sustaining bitcoin miners as they face the impending halving event in April.
