Bitcoin network activity declined to 11 months low, leaving the mempool almost empty

Transactions on the Bitcoin network have dropped to an 11-month low, according to data from CryptoQuant. This continues the decline in network activity that began last year when the daily transaction volume peaked at 810,850 transactions on November 19.

CryptoQuant head of research Julian Moreno observed the drop, noting that Bitcoin activity is at its lowest since March 2024. Average daily transactions on the Bitcoin network have fallen to around 400,000 over the past two months.

Bitcoin network activity is at its lowest since March 2024. (Source: Julio Moreno)

The decline in Bitcoin transaction volume has led to a corresponding drastic drop in network mempool usage. A Bitcoin mempool is the storage space for unprocessed Bitcoin transactions before miners include them in a block.

The number of unconfirmed transactions on the Bitcoin network has also fallen to around 10,000, a sizable drop from over 250,000 unconfirmed transactions in December 2024.

Interestingly, the decline in network activity also means that many mined Bitcoin blocks have gone without being fully filled. In one extreme case, Block 881931, mined by Antpool, had only 31 transactions and a size of 25.35 kilobytes (kB). This is far below the average number of transactions within a Bitcoin block, which usually exceeds 2,000.

Transaction fees drop below $1 on the Bitcoin network; Miners suffer

The decline in network activity means that fees on the Bitcoin network have also fallen, making it extremely cheap for users to complete transactions.

According to data from mempool space, average fees fell as low as 1 sat/vB ($0.14). Although they have increased to 3 sat/vB ($0.42), it remains relatively cheap. This is a positive change in tune after previous network congestions and high fees that users have complained about on the network.

However, a downside is that Bitcoin miners are now making far less from transaction fees, with an average of around $2,000 per block. This adds to the pressure miners have faced since the 2024 Bitcoin halving, which reduced mining rewards to 3.125 BTC.

At the time of the halving, which coincided with the launch of the Runes protocol, Bitcoin miners earned record revenue from transaction fees. This led stakeholders to predict that transaction fees could replace the mining rewards lost to halving.

However, declining network activity, which Moreno claims results from the drop in hype surrounding RUNES and BRC20 tokens, means that miners are stuck with only mining rewards even as they face near-record mining difficulty.

Bitcoin drops below $100k as Trump imposes tariffs on trade partners

Meanwhile, Bitcoin was meant to compensate for the halving through a price increase, but it has struggled in that area recently too. The flagship asset fell 2% in the last 24 hours after President Donald Trump announced tariffs against Mexico, Canada, and China.

The president imposed a 25% additional tariff on imports from Mexico and Canada and increased tariffs on Chinese imports by 10%. This move triggered retaliation from the countries, with Canada imposing 25% tariffs on some US goods and Mexico and China promising to take their measures. Chinese authorities also plan to file a complaint with the World Trade Organization.

Concerns about how these tariffs could lead to inflation caused Bitcoin to drop to $99,000 for the first time in six days. With that, the hash price also fell $58.46, further impacting miners’ profitability.

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