Key Points
- Bitcoin’s halving event led to a 10% recovery in its price and a surge in Bitcoin Layer 2 coins.
- Transaction fees on the Bitcoin network spiked due to increased activity but have now normalized.
Bitcoin experienced a successful halving event on the previous Friday, April 19. This took place at the block height of 840,000 and resulted in a 50% reduction in mining rewards.
The price of Bitcoin has since recovered over 10% from its pre-halving lows of $60,000. At the time of writing, Bitcoin’s market cap stands at $1.3 trillion.
Bitcoin Layer 2 Coins Rally
In addition to Bitcoin, several Bitcoin Layer 2 coins have seen significant growth in the days following the halving. These coins have reported increases ranging from 5-20%.
STX, the native cryptocurrency of the Bitcoin Layer 2 network Stacks, has risen 20% to $2.87 since the fourth Bitcoin halving. This surge makes STX one of the best-performing cryptos in the top 25 list over the last 24 hours.
Post-halving, other tokens like Elastos’ ELA and SatoshiVM’s SAVM have also seen value increases of 11% and 5% respectively. Bitcoin Layer 2 solutions, built atop the Bitcoin blockchain network, enhance scalability by processing transactions off-chain. These are typically projects that address transaction speed and scalability limitations on the Bitcoin network.
Fluctuations in Bitcoin Transaction Fees
Data from Glassnode shows that the average transaction fee rose to almost 0.0020 BTC following the halving. This is the highest it’s been since early 2018. The fee increase is attributed to the introduction of a new protocol called Runes, which allows users to create tokens on the Bitcoin blockchain.
The launch of Runes triggered a surge in speculation, token minting, and meme coin trading. This drove up transaction volumes and subsequently raised transaction costs.
On April 20, a day after the halving, Bitcoin transaction fees skyrocketed to $128, leading to millions of dollars in profits for miners. The fees have since cooled down to the range of $8–$10 for medium-priority transactions. Between April 15 and 20, Bitcoin’s transaction fees consistently exceeded those of Ethereum for six consecutive days. The seven-day average fee for Bitcoin now stands at $17.8 million.
In addition to the native tokens of the Bitcoin Layer 2 solution, the Bitcoin Ordinals NFTs have also gained attention over the weekend. Following a 60% drop in the floor price of Bitcoin Runestone, the floor prices of Ordinals like Bitcoin Puppets and NodeMonkes have surged by 20% and 7% respectively.
