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Bitcoin [BTC]: Silver lining for miners as fees exceed 2021 levels, more inside

2min Read

Bitcoin miners earned about $17.7 million through transaction fees on 8 May, higher than what they were at the peak of the 2021 bull market.

Bitcoin [BTC]: Silver lining for miners as fees exceed 2021 levels, more inside

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  • The divergence between daily miner revenue and 365-day SMA has broadened since the start of 2023.
  • There were instances of transaction fees exceeding the block rewards given to miners.

While the growing congestion on the Bitcoin [BTC] network may have spooked purists and affected users who now have to wait for extended periods of time to get their transactions validated, BTC miners have been laughing all the way to the bank.

Read Bitcoin’s [BTC] Price Prediction 2023-24

According to a data scientist from analytics firm Glassnode, miners earned about $17.7 million through transaction fees on 8 May. This was higher than what they were at the peak of the 2021 bull market. Though the fees fell on 9 May to $12.15 million owing to steps taken to mitigate congestion, the overall impact on miner’s revenue was huge.


Miners strike gold

A better way to look at BTC miners’ growing profitability was by comparing the total daily revenue earned by miners to the 365-day simple moving average. The chart below suggests that the divergence between the two has broadened since the start of 2023, with the differential reaching $17.15 million on 9 May.

Source: Glassnode

Within the past 24 hours, miner revenue exceeded 31%. On 8 May, the share had shot up to 42%. This indicated a positive shift that contrasted sharply with the battering that miners endured during the 2022 bear market’s lows.

Source: Glassnode

Miners need to be incentivized to participate in validating transactions and securing the Bitcoin network. The incentives come in the form of two methods: block rewards and transaction fees. While the first is getting less lucrative as the rewards progressively reduce every four years, more miners are relishing the idea of increased transaction fees.

In fact, for the first time since 2017, a single block’s transaction fees exceeded the block rewards given to miners according to a tweet by an analyst.

Steps to combat congestion

Meanwhile, faced with a growing transaction jam, core developer Ali Sherief proposed adding a runtime option that will instantly eliminate all unusual Taproot transactions, according to a tweet by popular journalist Colin Wu. However, popular consensus couldn’t be built on the same.

Is your portfolio green? Check out the Bitcoin Profit Calculator

Network traffic increased mostly due to transactions using Taproot addresses. On 9 May, 66% of all transactions on Bitcoin used Taproot.

Source: Glassnode

Owing to the concerns around congestion, BTC failed to break through the $28k level, trading at $27,639.89 as of this writing, data from CoinMarketCap showed. As per Santiment, BTC’s funding rate flipped to negative on crypto exchange BitMEX, indicating that more investors were positioned for price losses.


Saman Waris works as a News Editor at AMBCrypto. She has always been fascinated by how the tides of finance and technology shape communities across demographics. Cryptocurrencies are of particular interest to Saman, with much of her writing centered around understanding how ideas like Momentum and Greater Fool theories apply to altcoins, specifically, memecoins. A graduate in history, Saman worked the sports beat before diving into crypto. Prior to joining AMBCrypto 2 years ago, Saman was a News Editor at Sportskeeda. This was preceded by her stint as Editor-in-Chief at EssentiallySports.
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