Bitcoin Miners are continuing to see a large increase in Revenue due to bitcoin price increases. The last time Bitcoin saw an ATH Miner Revenue was April 2021. Since then, fees have reduced, but the block reward has stayed the same. What can we tell by looking at the data and price history?

  • Bitcoin Price reached all time high in early November of $69k
  • Fees have reduced significantly in the network
  • Retail seems to have left the trade, but price continues to climb.

In Early November, bitcoin hit all time highs in price action, as bitcoin saw a climb and reclaimed its original levels form the first half of 2021. This is interesting because usually during bull runs bitcoin fees are seen rising quickly, while more people are willing to pay a higher price to send their bitcoin quickly.

SegWit adoption has dramatically increased over the past few months. With SegWit transactions being around 85% of total transactions, the efficiency of total transactions has increased. Although this does not totally explain the drop in fee percent it is still meaningful being that SegWit transactions are up to 40% more efficient than legacy transactions.

Each bull market, price rises quickly and FOMO sets in. The demand to quickly send Bitcoin rises and people are willing to pay higher fees. Looking above at the second half of 2021, the price is high, but the fee amount is still low which means lower total revenue for miners.

One more thing to add would be the block reward halving. Each halving the miners Revenue, gets cut in half. This means fees continue to be a larger percentage of the total miner’s revenue. What stands out is that this bull run is not higher than 2017, but the total transaction size is noticeably higher.

With the fee percent being lower than 2017, it is hard to say what is exactly going on but here is the closest guess. What looks to be happening is efficiency in transaction from SegWit is higher this halving along with retail leaving the trade in the later half of 2021. People are willing to pay higher fees when bitcoin is rising quickly.

From a historical perspective, each halving shows a higher fee rate. 2021 seems to be different as there are lower fee rates but higher total transaction size. What's interesting is retail seems to not be in the trade now, but we are still in upper price bound territory. This may have to do with the available liquid supply dropping, causing a supply shock and increased price. All and all, as retail re-joins, fees will increase bringing more revenue to miners.