Fidelity Disputes Claims Bitcoin Security Drops After Halvings

Fidelity Digital Assets has pushed back on worries that Bitcoin’s security will weaken as block subsidies shrink through future halvings. In a research report authored by Daniel Gray, Fidelity argues that Bitcoin’s long-term protection is supported by a broader set of economic incentives beyond new coin issuance—particularly transaction fees and the costliness of mounting sustained attacks.

The debate matters because Bitcoin’s issuance schedule mechanically reduces the block reward every four years, eventually turning the network into one primarily funded by fees. Critics have long argued that if transaction fees fail to rise enough to replace falling subsidies, miners’ incentives could weaken and the security budget for the chain could erode.

Key takeaways

• Fidelity says Bitcoin’s security depends on more than block rewards, emphasizing transaction fees and broader incentives that make attacks prohibitively expensive.


• Gray highlights that miner incentives have historically strengthened alongside Bitcoin’s price, even as issuance falls across halving cycles.


• Since the April 20, 2024 halving, the block subsidy is 3.125 BTC per block, down from 6.25 BTC previously.


• Average daily miner revenue has increased across cycles—from about $26,300 early in the prior halving era to more than $40.2 million today, according to the report.


• Despite Fidelity’s long-term view, publicly traded miners still face near-term funding and operational pressures, contributing to an AI and HPC shift.

Fidelity’s argument: security isn’t only about subsidies

Fidelity’s report challenges a core criticism of Bitcoin’s halving design: that each quadrennial cut reduces miners’ income and could ultimately impair the network’s ability to sustain high levels of mining participation. The concern typically centers on the idea that lower block rewards must eventually be offset by higher transaction fees—or else miners’ profitability could drop to a level that discourages security spending.

Gray’s conclusion is that this framing understates how Bitcoin’s incentive system works in practice. According to Fidelity, the network is not secured by issuance alone. Transaction fees, market dynamics, and other economic forces can keep miners motivated to invest in and maintain the infrastructure needed to protect the blockchain.

In other words, the report argues that declining subsidies do not automatically translate into declining incentives. If the total revenue miners earn—issuance plus fees—holds up or grows, then the security that depends on miners’ willingness to keep operating remains supported.

The post-halving revenue picture

Fidelity anchors its case in the latest halving mechanics and the observed changes in miner income. Since April 20, 2024, Bitcoin miners have received a subsidy of 3.125 BTC per block, compared with 6.25 BTC during the prior cycle.

Gray argues that the reduction in issuance has not weakened miner incentives, largely because Bitcoin’s market price has risen enough to more than compensate. Fidelity points to growth in average daily miner revenue, stating it increased from roughly $26,300 during Bitcoin’s first halving cycle to more than $40.2 million at present.

“Despite declining issuance, miner incentives — and by extension, network security — historically strengthened alongside Bitcoin's price,” Gray wrote, according to the report.

This is a meaningful distinction for investors and builders: it implies the pathway from subsidies to fee-based security may be less abrupt than critics assume. Instead of treating the halving as an immediate security stress test, Fidelity frames the outcome as dependent on how fees and market conditions evolve relative to the declining reward schedule.

Why transaction fees are central—and why uncertainty remains

Even with Fidelity’s argument, the question of how Bitcoin transitions to fee-led security is still the focal point of long-term risk analysis. The network’s supply schedule is fixed, meaning new issuance will continue to shrink until it eventually disappears. The open uncertainty is whether transaction fees, in combination with other economic forces, will reliably sustain miner incentives through that transition.

Fidelity’s report does not remove that uncertainty; it addresses the claim that halving alone inevitably damages security incentives. By pointing to historical patterns—where miner incentives rose despite declining issuance across previous halving cycles—the report suggests the market has previously adjusted in ways that preserved or strengthened miner profitability.

For readers, the practical takeaway is that monitoring should extend beyond the headline halving reward. The combination of fee levels, total miner revenue, and the broader price trend will likely be more informative indicators of whether security spending remains well supported over time.

Near-term pressure for miners: AI and HPC expansion

While Fidelity frames Bitcoin’s long-term security economics as resilient, the near-term reality for many publicly traded miners has been more difficult. Multiple analysts and industry narratives cited in the broader coverage describe a challenging environment shaped by reduced mining rewards, higher costs, and intense competition.

That pressure has helped drive diversification strategies. Some miners have moved toward artificial intelligence and high-performance computing, leveraging existing power infrastructure and data center assets rather than relying only on Bitcoin mining revenues.

Earlier coverage referenced in the article noted that several miners have been pursuing these alternatives, including a shift towards AI-oriented infrastructure. Separately, a report by VanEck estimated publicly traded miners could require up to $50 billion in additional capital to fully transition to AI infrastructure—an illustration of how large the investment hurdle can be when expanding beyond crypto mining.

Blocksbridge Consulting, quoted in a Miner Weekly publication, highlighted operational differences that matter for business planning: it argued that Bitcoin mining can often be supported with modular infrastructure and ASIC fleets that tolerate fast curtailment, while AI and HPC facilities require higher standards for uptime, cooling, redundancy, networking, and customer support.

This creates an asymmetry investors should pay attention to. Even if Bitcoin’s security budget holds up in the long run, individual mining companies may still face financing constraints and execution risk while they adapt to changing economics and technology demands.

Readers should watch how miners balance these two tracks—supporting Bitcoin’s security today while making capital-heavy bets on future revenue streams. The timing of that pivot, and the ability to raise funds without impairing balance sheets, may become an increasingly important variable for equity holders as the industry continues adjusting to post-halving economics.

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