Declining Bitcoin Fees Since April 2024 Could Weaken Miner Incentives; BTCfi May Help Restore On-Chain Activity

• Major decline: Bitcoin’s daily fees are down 80% since April 2024, with ~15% of blocks mined with minimal or no fees.

• Reduced fee revenue follows the 2024 halving and a slowdown in non-monetary activity like Ordinals and Runes.

• BTCfi growth could restore onchain activity: spot ETF flows, layer adoption, and BTC-native DeFi are key variables.

Meta description: Bitcoin transaction fees collapsed 80% since April 2024, pressuring miner incentives; learn how BTCfi could restore fee revenue and network security. Read now.

What is causing the Bitcoin transaction fee collapse?

Bitcoin transaction fees have plunged by more than 80% since April 2024, driven by a post-halving reward cut, waning non-monetary activity (Ordinals and Runes), and growing off-chain custody via spot ETFs that limit onchain transfers. The result is weaker fee revenue for miners and rising questions about long-term security.

Bitcoin’s daily transaction fees have dropped over 80% since April 2024, raising concerns about long-term network security. BTCfi could offer a way out.

Daily transaction fees on the Bitcoin network have collapsed by more than 80% since April, according to institutional reports. As of August 2025, nearly 15% of blocks are being mined with minimal or no transaction fees — often one satoshi per virtual byte or less.

That reduction benefits users with cheaper payments but strains miner economics, particularly after the April 2024 halving reduced block rewards to 3.125 BTC. Miners expected a larger fee market to fill the gap, but demand has not matched that expectation.

How has onchain activity changed since the Ordinals boom?

Bitcoin’s onchain activity has cooled substantially since the Ordinals and Runes surge. OP_RETURN transactions, which accounted for over 60% of daily volume at the boom’s peak, now make up roughly 20% of daily volume, per industry reporting.

Alternative chains such as Solana have absorbed high-frequency use cases like memecoins and NFTs, while spot Bitcoin ETFs — now holding more than 1.3 million BTC in aggregate according to public reports — keep large balances offchain and reduce transactional throughput.

How can BTCfi restore Bitcoin fee revenue?

BTCfi refers to Bitcoin-native decentralized finance built on layers and protocols that use Bitcoin as the base asset. If BTCfi drives repeated onchain movement — for lending, trading, and composable products — it will increase block usage and, therefore, fee income for miners.

Experts interviewed for this report emphasize the mechanics: every BTCfi action that moves Bitcoin consumes block space and generates fees. Scaling BTCfi requires improved tooling, liquidity rails, and user UX to translate offchain value into onchain transactions.

“As block rewards shrink, more weight falls on transaction fees,” said Pierre Samaties, chief business officer at the Dfinity Foundation, in industry commentary. “If usage does not grow, that base thins, and the guarantees weaken. Sustained throughput is essential for the system to defend itself.”

Why does BTCfi matter for Bitcoin’s role as a financial primitive?

Bitcoin has traditionally been framed as “digital gold” — a store of value rather than a transactional primitive. BTCfi aims to repurpose Bitcoin as a foundational financial primitive that developers can use to build flows, tools, and liquidity layers.

Julian Mezger, chief marketing officer of Liquidium, notes that infrastructure improvements over the past five years have paved the way for multi-layer Bitcoin ecosystems and true Bitcoin-native DeFi.

Frequently Asked Questions

How big is the fee decline on Bitcoin since April 2024?

Daily transaction fees have fallen by over 80% since April 2024, with reports indicating nearly 15% of recent blocks mined with minimal or no fees. This decline follows the halving and reduced non-monetary activity.

Can miners sustain network security with lower fees?

Miner revenue currently depends on block rewards and fees. With block rewards halved, sustained lower fees compress miner margins and could, over time, challenge network security if onchain demand does not rebound.

What are practical steps to boost onchain fee revenue?

Key steps include fostering BTCfi adoption, improving wallet UX for repeated onchain flows, adding liquidity rails that settle on Bitcoin, and designing incentives that encourage transaction frequency.

Key Takeaways

• Fee collapse: Bitcoin transaction fees have dropped ~80% since April 2024, pressuring miner incentives.
• Driving factors: The halving, decline of Ordinals/Runes activity, and large spot ETF holdings have reduced onchain throughput.
• Actionable path: BTCfi growth — plus better infrastructure and incentives — could restore meaningful fee revenue and strengthen security.

Conclusion

Bitcoin’s fee market has contracted sharply, creating a clear challenge for miner economics and network security. BTCfi offers a feasible route to boost onchain movement and fees by turning Bitcoin into a financial primitive used for lending, trading, and composability. Stakeholders should prioritize infrastructure and UX to convert offchain value back into repeatable onchain activity.

Publication: COINOTAG — Published: 2025-08-15 — Updated: 2025-08-15