Bitcoin’s flagship cryptocurrency, Bitcoin, is experiencing an anomalous period: while market sentiment indicates renewed bull run, key on-chain metrics like network fees have taken an unexpectedly downward turn year-to-date; transaction fees on its network have seen annual decrease of almost 56 % and still price action remains above six figures (CryptoSlate +1).
Fee Collapse Contrasting Price Strength
Initial daily Bitcoin network fees averaged approximately 4.7 BTC daily at the beginning of 2025; as of early November this figure had decreased to just under 2 BTC daily, reflecting how users are paying less for block space compared with at the start of 2025. [Source: CryptoSlate].
Fee-to-reward ratio has decreased steadily from approximately 1.35 % in Q1 2018 to approximately 0.78 % today, suggesting less congestion on networks, smaller average block sizes and reduced urgency-driven transactions.
Bitcoin’s price remains resilient – recently trading above $105,000 and reaching near the $110,000 resistance zone. Finance data indicates its most recent value at near $106,199.
Bitcoin (BTC) currently sits at $106,199.00, down 3.99% from where it started at 107,776.00 on Dec 1, 2013. Analysts and market watchers alike have taken notice of its fluctuating price as fee income decreases over time. MAX
What factors have caused the decrease in fees?
Multiple factors help explain this trend of decreasing fees:
Reduced on-chain urgency: In comparison with past boom phases, less users appear eager to send coins instantly, making fee bidding wars less frequent and CryptoSlate noting it has been “strangely quiet”.
CryptoSlate
A higher base supply and older coins moving less: With much of BTC held for longer, transactional activity has decreased, decreasing average fee pressure.
Competition from layer-2 solutions and off-chain rails: With transactions moving away from expensive on-chain fee markets in favor of cheaper alternatives, some transactions have begun moving towards layer-2 solutions and off-chain rails that reduce transaction fees.
Less Madness, More Consolidation: Post-Halving dynamics suggest a more measured cycle that tends to curb any sudden and speculative spikes in fees associated with memecoin inscriptions or NFT traffic spikes.
fideliydigitalassets.com for further analysis on why it matters in relation to Bitcoin’s bull case.
Though price momentum remains positive, the decreasing fee base raises questions regarding network health and ecosystem vibrancy:
Mining Economics: Miners increasingly depend on fee income rather than block rewards for income generation, and when fees market stall, miners have no other recourse but rewards, which could place strain on smaller scale operations.
Activity Signals: Fees can serve as a proxy measure of network utilization. A sustained decline could indicate weaker real-world transactional adoption – potentially increasing risks if speculative flows fade.
Bull Run Sustainability: While prices remain at elevated levels, many investors closely track on-chain metrics to verify their investment decisions. A mismatch between price and network fundamentals could weaken investor conviction.
Key Milestones to Keep an Eye Out On
Break Above $110,000-$113,000: According to analysts, analysts believe reclaiming this zone could revitalize momentum and revive fees. CoinDCX (+1), Fee Increases: Any sustained change in daily fees or fee-to-reward ratio would signal renewed usage and should be seen as positive signs for renewed demand.
Mining Stress: Look out for signs of miner capitulation or consolidation when fee income remains weak, even with increased power and hashprice.
Macro & regulatory developments: Institutional flows, ETF announcements or major regulatory shifts could prompt transactional surges that lead to higher fees and transactionsal activity spikes.
Bitcoin’s current bull-run narrative remains intact — though metrics reveal an evolving network that is slowly recovering rather than expanding rapidly. If user activity and fees increase again, the case for additional upside can strengthen; otherwise, price might lose some support which previously propelled prior runs.
