Fidelity Digital Assets has pushed back strongly against fears that Bitcoin’s network security weakens after each halving event, arguing that economic incentives beyond block subsidies alone keep miners committed to protecting the network.
In a research report titled “Bitcoin’s Programmed Security” (part two), published on June 24, 2026, the firm directly addressed a long-running debate about whether declining block rewards could eventually undermine the proof-of-work network. Analyst Daniel Gray said transaction fees, market demand, and miner competition still support network protection, framing Bitcoin security as a market-based layer where miners continue to commit resources when total rewards justify costs.
The report noted that average daily miner revenue rose from roughly $26,300 in Bitcoin’s first halving cycle to more than $40.2 million in later cycles, despite lower issuance. Fidelity argues that miners respond to total revenue—block rewards plus fees—rather than subsidy size alone, and that Bitcoin’s price appreciation has historically offset smaller subsidies. This counters the claim that each halving places Bitcoin closer to a security crisis.
The analysis also highlights Bitcoin’s difficulty adjustment as an automatic defense. When miners exit, difficulty drops, making honest mining more profitable and maintaining a cost differential that makes attacks economically irrational. A successful 51% attack would also not grant control over Bitcoin’s core rules, including the 21 million supply cap, limiting its practical value.
At the time of the report, Bitcoin’s network difficulty stood at 133,869,853,540,305, and hash rate remained near all-time highs around 878 EH/s, signaling robust mining participation over two years after the April 2024 halving cut the block reward from 6.25 BTC to 3.125 BTC. The report acknowledges short-term pressure on public mining companies but separates their corporate finance challenges from the network’s base-layer security, arguing that inefficient operators may exit while stronger miners absorb market share.
The long-term thesis depends on transaction fees maturing to supplement declining subsidies. Fidelity points to fee spikes from Ordinals, inscriptions, and layer-2 protocols as early signs, along with institutional demand via spot Bitcoin ETFs. The SEC’s March 2025 staff statement recognizing proof-of-work mining as a functional component of blockchain infrastructure adds regulatory context.
The report’s timing—amid “Extreme Fear” on the Crypto Fear & Greed Index and ETF outflows—underscores Fidelity’s structural argument that Bitcoin’s built-in mechanisms make catastrophic security failure unlikely as long as meaningful demand exists.
