Bitcoin Miners Suffer as Transaction Fees Drop to Lowest Level in Three Years

Key Takeaways:

• Bitcoin transaction fees now contribute just 0.96% of rewards, their lowest share since January 2022.
• Hash price has halved since the April 2024 halving, reducing miner profitability.
• New US tariffs have inflated equipment costs by 36%, compounding operational pressures.

Despite Bitcoin holding steady above $100,000, miners face growing financial pressures as transaction fees plummet. In June, fees contributed just 0.96% of total block rewards, the lowest proportion since January 2022. According to TheMinerMag, miners now depend more on the fixed block subsidy than on user fees.

The drop in fee revenue has been sharp. While fees contributed 1.3% of rewards in May, they fell further in June, leaving miners earning under 0.03 BTC per block in fees. This represents a major decline from 6.7% in May 2024. At the same time, mining difficulty remains high and energy costs continue to rise, adding to operational pressure.

Hashprice Slump and Tariff Surge Deepen Miner Struggles  

Hashprice, a key profitability metric that measures revenue per petahash per second, has plunged to around $53 per PH/s, nearly half of its pre-halving levels. 

The April 2024 Bitcoin halving, which cut rewards from 6.25 to 3.125 BTC, significantly worsened this decline.

Adding to the strain, U.S.-based miners now face a 36% rise in hardware costs following the reinstatement of tariffs under President Donald Trump. As detailed in a previous HedgewithCrypto’s report on tariffs, this has widened the cost gap between U.S. and international operations.

Network usage has also declined, with many blocks carrying minimal data. 

Reduced transactions mean fewer transaction fees, forcing miners to liquidate their BTC holdings during April's downturn, when prices briefly dipped below $75,000 amid tariff concerns.

https://twitter.com/gregory_nico/status/1906583536414425581 

Amid these challenges, Jack Dorsey, CEO of Block (formerly Square), argues that Bitcoin must evolve beyond being “digital gold” to reach its full potential. In a recent post on X (formerly Twitter), Dorsey emphasized that Bitcoin’s long-term success hinges on becoming a widely used payment tool, not just a store of value.

Dorsey backs projects like OCEAN mining pool, Bitkey wallet, and Square’s payment integrations to promote real-world use. 

Miners Diversify into AI and HPC Amid Economic Pressure  

In response to falling mining revenues, companies are shifting toward artificial intelligence and high-performance computing. 

These sectors demand significant energy and processing capacity, which miners already control. VanEck’s recent analysis projects that miners could earn $13.9 billion annually by 2027 from AI and HPC services.

Core Scientific, one of the largest Bitcoin miners, has signed a 12-year deal with CoreWeave to supply 200 megawatts of energy for AI computing, which is expected to generate $3.5 billion. The partnership has grown to 590 megawatts with more than $10 billion in projected revenue. More details on this are shared via Core Scientific’s updates.

Similarly, Canada’s Hive Digital Technologies is transitioning into a broader infrastructure provider. According to its official report, Hive is repurposing its facilities for AI, gaming, and graphics rendering, moving beyond Bitcoin mining.