Bitcoin Halving Occurs At 00:09 UTC, Brings Spike in Transaction Fees

Bitcoin’s fourth halving occurred early Saturday, marking a pivotal moment in the blockchain’s history. Yet, it wasn’t the expected change in Bitcoin’s price that captured attention. Instead, it was the dramatic increase in transaction fees that became the day’s most notable event.

The halving, a regular event that reduces the rewards miners receive for verifying transactions, took place at 00:09 UTC with the addition of the 840,000th block to the Bitcoin blockchain. Traditionally, this event leads to a reduction in Bitcoin’s inflation rate and often precedes price rallies. This time, however, fees spiked as a new protocol called Runes was launched, leading to a surge of transactions.

The price of Bitcoin remained relatively stable, hovering around $63,700, after slumping under $60,000 on Friday. The upward momentum resumed, but it wasn’t the highlight. The launch of Casey Rodarmor’s Runes protocol triggered a frenzy among speculators. Users rushed to create digital tokens, causing transaction fees to skyrocket.

This spike in fees brought new concerns about the Bitcoin ecosystem’s stability. The high costs could deter smaller transactions and lead to network congestion. While some miners might welcome the increased fees to offset the reduced rewards, the broader impact on Bitcoin’s usability was questioned.

Bitcoin’s halving has historically been a catalyst for price rallies. However, the recent surge in Bitcoin’s value from $15,500 in late 2022 to $73,680 earlier this year suggests that the market had already priced in the halving. Much of this rise was due to optimism around the approval of spot bitcoin ETFs in the U.S., which started trading in January.

Despite the price stability, some analysts remain cautious. On Thursday, JPMorgan forecasted a drop in Bitcoin’s price after the halving, citing “overbought conditions” due to the high level of open interest in bitcoin futures. This perspective added to the uncertainty surrounding Bitcoin’s future price trajectory.