The Bitcoin community recently observed a monumental event in its 15-year history with the eagerly anticipated fourth halving, signaling a significant shift in the blockchain landscape. Halvings, occurring roughly every four years, drastically reduce the block reward granted to miners for generating new Bitcoin. This reduction holds profound implications not only for miners but also for the broader crypto ecosystem.

Revered by the blockchain community, the halving represents a pivotal milestone, and at precisely 00:09 UTC on Saturday, April 20, 2024, the 840,000th block was added to the Bitcoin blockchain, marking the culmination of the halving process. While Bitcoin's price remained relatively stable above $63,000, the spotlight soon shifted to a remarkable surge in transaction fees.

Transaction fees emerged as a newfound frontier, driven by the launch of a groundbreaking protocol known as Runes. Developed by Casey Rodarmor, the innovator behind the Ordinals platform facilitating NFTs on Bitcoin, Runes enables users to mint digital tokens directly on the blockchain. The introduction of this protocol sparked a frenzy of transactions as speculators rushed to create these novel tokens, resulting in a meteoric rise in transaction fees.

The actual halving block (block 840,000) witnessed an unprecedented fee of 37.6 BTC, equivalent to over $2.4 million. This hefty fee accompanied the victorious mining pool, ViaBTC, which secured the reduced bitcoin rewards at the rate of 3.125 BTC per block. Dubbed "epic sats" in colloquial terms, these minute Bitcoin denominations post-halving could potentially hold significant value, surpassing the current price of an entire Bitcoin, according to speculation among mining executives.

Bitcoin miners achieved a milestone by collectively garnering $78.3 million in transaction fees, marking a record high in USD-denominated transaction fee revenue on the Bitcoin network. Notably, between April 19 and 20, miners accrued $89.8 million in transaction fees, surpassing their total earnings for the entire month of March, which amounted to $85.9 million.

This increase in transaction fees coincided perfectly with the launch of the Runes protocol and within an hour, 853 runes had already been created, as reported by the website The fierce competition to mint these tokens was evident in the fees paid by users, with the $2.4 million fee for the halving block far exceeding the $40,000 to $60,000 fees typical of pre-halving blocks.

Post Halving

The halving directly impacts mining economics by halving the block reward, effectively reducing the BTC received by miners by half. Consequently, transaction fees assume heightened significance as a primary source of income for miners. Bitcoin's protocol incorporates a scarcity mechanism, ensuring a decrease in the annual inflation rate over time. Each halving event diminishes the daily supply of Bitcoin, fostering demand and potentially driving price appreciation.

Hash Price

As initially anticipated, following the halving, the hash price started to edge lower towards $60 per PH/s.  However, within a few hours, the level of transaction fees started to rise significantly, reaching a high of nearly $128 per PH a day, impressively 7 times the level seen pre halving.

The 24 hours following the halving were also really beneficial for the North American publicly listed Bitcoin miners.  Core Scientific (CORZ) have been able to achieve maximum benefit from their self-mining operational hash rate of 19.3 EH/s, producing a total of 57.3 Bitcoin in the 24 hours following the halving.

From the graph above, compare this to their daily totals for the 3 days prior to halving, of approximately 30 Bitcoin per day.  If you consider the rewards for mining a block are now 50% less at 3.125 Bitcoin, it’s evident that the transaction fees are still providing the miners with some respite with additional unplanned revenues.

Today the hash price achieved per PH/day is down to $51, its lowest level  in the last 15 years.  If the Bitcoin price continues to fall below $60,000, it will be clear that at these levels inefficient miners will be switched off globally, as margins will become tighter.

Global Hash Rate

The global hash rate since the halving has had no significant impact as anticipated.  In fact many observers and analysts had predicted a significant drop in hash rate, as the block rewards were cut by 50%.  JPMorgan analysts had actually released a report in October 2023, that the consolidation of Bitcoin miners was poised to intensify subsequent to the halving event with the potential decline of 20% in the bitcoin network's hashrate post-halving, attributed in the main to inefficient mining rigs. This didn’t occur and the global rate actually achieved 801 EH/s on April 23, 2024.

Network Difficulty

The Bitcoin network difficulty represents the computational challenge miners face when solving complex mathematical puzzles to validate transactions and create new blocks on the Bitcoin blockchain, every 10 minutes. It adjusts dynamically to maintain a consistent block generation rate, ensuring security and stability. Higher difficulty requires more computing power and contributes to network resilience to mine new blocks.  This provides security and deters potential attackers from gaining majority control (a 51% attack) over the network.  This increased robust difficulty level also prevents malicious actors from altering the blockchain with invalid transactions.

In an unprecedented way the first Bitcoin network difficulty adjustment, post halving, increased by 2%.   The next difficulty adjustment due to occur on May 8, 2024 is predicting a decrease to occur, but this adjustment forecast can dramatically change in the days before.

Final Thoughts

Are we now seeing a change in the Bitcoin cycle? For sure, the impact from the U.S. Securities and Exchange Commission (SEC) approving 11 Bitcoin exchange-traded fund (ETF) applications, in January 2024, has seen significant inflows into purchasing Bitcoin.

However, Hong Kong this week launched three Bitcoin and three Ether-based spot Bitcoin ETFs on April 30, following approval by the Securities and Futures Commission (SFC), Bloomberg recently reported and managed to achieve a total of $123.61 million in combined assets, according to Eric Balchunas, senior ETF analyst at Bloomberg.  This is significantly less than US spot Bitcoin ETFs, which attracted nearly $4 billion in assets under management, with a trading volume of $4.5 billion on the first day of trading alone.

As the mining difficulty looks likely to see a reduction at the next change in 8 days time combined with the Bitcoin price having dropped by 10% in the last 7 days to $57,000, and with hash price reaching new lows of $45 per PH per day, there’s little respite for miners currently. This will focus miners to continue to attract the lowest energy cost, seek potential revenue streams for utilizing the heat produced from mining and utilize cost management principles to lower discretionary costs to find profitability in this post-Halving turbulence.