Bitcoin Miners Struggle as Rewards Shrink and Fees Plunge Post-Halving

The Bitcoin mining industry is under mounting pressure following the network's April 2024 halving, which reduced block subsidies from 6.25 BTC to 3.125 BTC.

The Bitcoin mining industry is reportedly facing increasing difficulties following the network's April 2024 halving, which decreased block subsidies from 6.25 BTC to 3.125 BTC.

Despite BTC's price now being at $95,000, miner earnings have not risen proportionally, with several measures highlighting sharp contractions in profitability.

One of the most striking shifts post-halving is the decline in transaction fees as a share of total miner revenue. Currently, fees contribute 1.48% to block rewards, one of the lowest ratios since early 2023. This drops reflects the waning demand for on-chain block space.

Temporary fee spikes from events like the launch of Runes and activity surrounding Ordinals pushed average fees to $127 per transaction in April 2024. However, those spikes proved fleeting.

With fee levels having since collapsed below $2, transaction-based compensation for miners appears fundamentally unsustainable.

Another concerning indicator is the stagnation of the hashprice despite Bitcoin's surging spot price. Hashprice, which measures miner earnings per petahash per second (PH/s), has failed to rise. As of late April 2025, hashprice stood at $48.9 per PH/s/day.

This contrasts sharply with previous bull cycles, where hashprice typically soared alongside BTC's value. The current discrepancy has left many mining operations struggling.

Mining rigs operating at 25–38 J/TH can only generate around $0.06 per kWh, which falls below the U.S. grid electricity average of $0.08. This puts even moderately efficient miners at risk of negative margins, pushing smaller or higher-cost operators to consider shutting down or upgrading hardware.

The reduced fee contribution and stagnant hashprice highlight a broader concern about Bitcoin's long-term security model.

As block subsidies continue halving every four years, the network is expected to rely more heavily on transaction fees to incentivize miners. However, with off-chain solutions like the Lightning Network serving over 650 million indirectly connected users, on-chain activity seems increasingly insufficient to fill the revenue gap.

The sustainability of miner incentives, crucial to the network's security, may depend on new innovations in layer 2 adoption, fee market mechanics, or even protocol-level changes.