Bitcoin's average daily transaction fees fall back to Ethereum levels after Runes hype subsides

Average daily Bitcoin BTC +0.16% transaction fees have fallen back to the same level as Ethereum after the frenzy of activity surrounding the launch of the Runes protocol died down after the halving.

The seven-day moving average of daily Bitcoin transaction fees surged to an all-time high of $25.8 million on April 24, more than five times the daily transaction fees Ethereum was generating at the time. However, it subsequently fell to $4.1 million on Wednesday — the same daily transaction fee average as Ethereum.

Similarly, average individual transaction fees on Bitcoin spiked to $40 on April 24 — ten times higher than Ethereum. The seven-day moving average dropped to $8.60 on Wednesday but was still more than double Ethereum’s average of $3.40.

Runes transaction fee windfall subsides

After Bitcoin’s fourth halving block 840,000 generated $2.4 million in fees — far exceeding the approximate $200,000 worth of block subsidy reward — bitcoin went on a record 104-block run of transaction fee rewards higher than the subsidy, according to the Bitcoin explorer Mempool.

While transaction fee rewards have since reduced considerably, they still account for around 13% of total block rewards on a seven-day moving average basis compared to around 3% before the halving, per The Block’s data dashboard. 

Much of the transaction fee activity can be attributed to the hype surrounding Runes — a new fungible token standard for Bitcoin launched at the halving — which generated over $135 million in fees for miners during their first week.

The Runes protocol was developed by Ordinals creator Casey Rodarmor, offering a more efficient solution for “etching” (creating) tokens on Bitcoin compared to BRC-20 tokens that use Ordinals inscriptions. 

Data from the Runes marketplace Unisat reveals that around 65,000 Runes tokens have been minted to date, driving the demand for network blockspace and, subsequently, network fees. Among the tokens under the Runes standard, the most notable is DOG, which has the highest market cap at around $350 million, according to Magic Eden data.