Bitcoin Price Holds Firm, But Weak Onchain Demand Raises Miner Concerns
Bitcoin continues to trade near record highs, but the blockchain itself tells a quieter story. As institutional capital flows into ETFs and custodial products, onchain activity is drying up—posing fresh challenges for network sustainability.
According to data from Glassnode, transaction fees on the Bitcoin network have dropped back toward decade-long lows. Despite BTC flirting with the $100,000 mark, blockspace demand is muted. Fee spikes—once a hallmark of previous bull runs—are notably absent in the current cycle.
A recent Galaxy Research report highlights the scale of the shift. Median daily fees have plunged more than 80% since April 2024. Roughly 15% of blocks are now clearing at the minimum rate of 1 satoshi per vbyte, and nearly half of all blocks are not reaching full capacity—signs of a sluggish mempool and soft network utilization.
This structural change is largely attributed to the rise of spot ETFs and custodial holdings, which now account for over 1.3 million BTC. Assets held in these vehicles are rarely moved, reducing transactional activity onchain.
Retail users, once a key source of fee pressure, are also migrating away. Activity once native to Bitcoin—including memecoin speculation and NFT trades—has shifted to faster, lower-cost networks like Solana.
The implications for miners are stark. With the latest halving cutting block rewards to 3.125 BTC, and fees contributing less than 1% of miner revenue in July, profitability is under strain. In response, many publicly traded miners are pivoting toward AI infrastructure and high-performance computing services to diversify income streams.
Bitcoin may be attracting capital—but the blockchain’s fading transaction volume is sparking concern over long-term network economics.
