Key Points:
- Bitcoin network transactions have hit their lowest level since March 2024, with volumes dropping over 43% from the October peak.
- Reduced network activity has led to lower transaction fees (1 sat/vb) and a nearly cleared backlog of unprocessed transactions.
Bitcoin network transactions have fallen to their lowest level in months, with volumes reaching a new low since March 2024, according to Julio Moreno, head of research at CryptoQuant.
Read more: US Bitcoin Spot ETFs Achieve Massive $5.3B Inflows in January
Bitcoin Network Transactions Hit Lowest Level Since March
The decline in activity has led to a significant drop in unprocessed transactions and Bitcoin network transaction fees.
The Bitcoin mempool, which holds pending Bitcoin network transactions, saw a sharp reduction, resulting in multiple blocks being mined without reaching full capacity. Transaction fees have also plummeted, falling to just 1 satoshi per virtual byte (sat/vb), indicating lower competition for block space.
Data from The Block reveals that Bitcoin’s network processed the fewest transactions in 11 months this January, marking the third consecutive month of decline. Monthly transactions have dropped over 43% from the peak recorded in October 2024.
Bitcoin Miners Face Profitability Challenges
The backlog of pending transactions, which stood at around 250,000 in late December, has now been nearly eliminated, as per Johoe’s Bitcoin Mempool Statistics.
The declining Bitcoin network transaction volume poses challenges for Bitcoin miners, who rely on fees and block rewards for revenue. In response to these challenges, some miners are exploring alternative revenue sources, such as integrating artificial intelligence (AI) solutions and increasing Bitcoin treasury adoption.
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