Bitcoin mining revenues have experienced a significant decline following the April 2024 halving, creating financial pressure for many miners. This downturn has been primarily driven by the sharp drop in transaction fees, which now account for only about 1.48% of the block reward, the lowest share seen since 2023. As the fees have dwindled, Bitcoin miners have increasingly relied on the block subsidy, which dropped to 3.125 BTC per block after the halving. This is a stark reduction from the previous subsidy levels, exacerbating the cash flow issues miners are now facing.

The situation worsened as hashprice remained stagnant in the wake of the halving. In late April 2025, hashprice was recorded at $48.9 per PH/s/day, failing to align with the surge in Bitcoin’s spot price, which was hovering around $95,000 at the time. This discrepancy between the hashprice and Bitcoin’s price has created significant challenges for power-hungry mining rigs, causing many to operate at a loss. For example, mining units with efficiencies ranging from 25-38 J/TH were earning only about $0.06 per kWh, whereas electricity grid costs are estimated at $0.08 per kWh. This imbalance means that many mining operations are financially unviable, further exacerbating the sector’s difficulties.

While certain activities like Ordinals and Runes generated temporary spikes in fees—such as the $127 per transaction recorded during the April 2024 introduce of Runes—the fee surge was short-lived. After the initial excitement, average fees have since collapsed to below $2 per transaction, signaling a decline in transaction-driven revenue. Even though the Bitcoin Lightning Network has grown and provided indirect access to more users, off-chain transactions have not had a significant impact on block rewards.

The persistent fee compression raises questions about the long-term sustainability of Bitcoin mining, especially for smaller or less efficient miners. In light of these concerns, developers are exploring potential solutions. Soft-fork proposals such as OP_CAT and CTV, which could enhance Bitcoin’s transaction capabilities or block capacity, are being watched closely by the mining community. Galaxy Research has indicated that consensus around these proposals could be reached by 2025, though the timeline for activation remains uncertain. These changes could potentially offer relief to miners if implemented, but for now, many are left to grapple with the current challenges.

Stress tests conducted by researchers highlight the vulnerability of miners in this post-halving environment. At a Bitcoin price of $96,000 and transaction fees at 1% of the block reward, approximately 35% of the network’s hashpower would be running at a loss if electricity prices are at the standard rate of $0.08 per kWh. If Bitcoin’s price were to fall to $85,000 and fees remained at 1%, nearly one-third of the network’s mining power could operate below break-even levels. Even at $96,000 per Bitcoin, miners would still struggle if fees stay at the low 1% mark, as 20% of mining rigs would remain unprofitable. This highlights how sensitive miners’ margins have become to fee fluctuations, especially after the halving event.

The fallout from these conditions is already evident, as older and less efficient mining rigs are becoming increasingly unprofitable. These older units are likely to be the first to be paused or shut down, which could lead to fleet upgrades as miners try to maintain profitability. However, this raises concerns about Bitcoin’s decentralization, as a more consolidated mining landscape could result from the closure of smaller, less efficient operations. As these rigs go offline, the overall network hash rate might decline, impacting Bitcoin’s security and stability in the long term.

Without stronger fee markets or a new demand cycle for block space, the current situation could continue to put significant pressure on the industry. The block subsidy alone may not be enough to sustain many miners, particularly those with older rigs or higher electricity costs. To remain viable, miners will need to rely more heavily on transaction fees, but with the current fee structure, this is increasingly difficult.

In conclusion, Bitcoin miners are navigating a difficult post-halving environment, with fees at historically low levels and block subsidies offering limited relief. The rise of more efficient mining rigs and the possibility of network upgrades could provide some hope for the future, but until these changes materialize, miners face an uncertain and challenging landscape. The sustainability of Bitcoin mining operations will depend heavily on future developments in transaction demand, fees, and network improvements. As the industry braces for these shifts, it remains to be seen whether Bitcoin mining can maintain its current decentralized structure or whether the financial pressures will lead to further centralization.