Bitcoin's mempool cleared for first time since Jan 2023, sparking concerns of long-term security budget sustainability

TL;DR:

Last week, Bitcoin's mempool dropped to 0 vBytes, making it the first time this happened since Jan 2023. It means there is little demand for on-chain Bitcoin transactions.

On the positive side, Bitcoin fees are at the lowest they've been in years. On the negative side, this usually only happens during bear markets, and it shows that Bitcoin's security budget is not sustainable when the block subsidy is gone. Mining revenue collapses 10-100x whenever this happens, and revenue becomes extremely unstable.

For the past 2 years, Ordinals and Inscriptions have dominated activity, giving hope that Bitcoin's security budget could be sustained in the long run after the block subsidy programmatically collapse. But even Ordinals activity has dropped considerably recently as people flee away from memecoins.

Overall, the mempool clearing coupled with transaction fees being stagnant is a reminder that Bitcoin mining needs Bitcoin to evolve into a robust platform for mining to remain a profitable business.

Source is from Galaxy Research's weekly newletter: https://www.galaxy.com/insights/research/weekly-top-stories-2-7/