Bitcoin Near Record Highs, But Blockchain Activity Stalls — Miners Feel the Squeeze
While Bitcoin hovers near all-time highs, its underlying blockchain tells a different story — one of slowing activity and weakening miner economics.
Glassnode data reveals that Bitcoin transaction fees have fallen close to decade lows, even as BTC approaches six figures. Historically, rising prices coincided with spikes in onchain activity and network congestion. But in this cycle, fees have remained flat, suggesting that user demand for blockspace has decoupled from price momentum.
A new Galaxy Research report underscores this shift. Median daily fees have dropped more than 80% since April 2024, and nearly 15% of daily blocks are clearing at the minimum fee rate — just 1 satoshi per vbyte. Almost half of blocks are not full, pointing to a lack of competition for blockspace and a thin mempool.
This marks a stark departure from earlier bull markets, where surging usage drove up fees. Instead, the 2025 rally appears to be led by institutional inflows into spot Bitcoin ETFs and custodians, which now hold over 1.3 million BTC. Coins parked in these vehicles rarely move, reducing the frequency of onchain transactions.
At the same time, retail users have increasingly shifted to Solana and similar high-throughput chains for NFTs and memecoins, attracted by faster speeds and lower costs. This migration has further dampened transaction demand on the Bitcoin network.
For miners, the implications are serious. After the April halving, block rewards dropped to 3.125 BTC, and fees made up less than 1% of revenue in July. With operating margins tightening, many publicly traded mining firms are exploring diversification into AI data centers and high-performance computing (HPC) to stay profitable.
In short, Bitcoin’s price may be breaking records — but the blockchain’s pulse is weakening, and the mining industry is feeling the pressure.
