Before the Bitcoin halving was set to occur, the Bitcoin network experienced a surge in high demand once again. Some of this demand originated from the customary group of Ordinals traders.
Starting from Thursday, according to mempool.space’s latest data, Bitcoin transaction fees have risen above 0.0009 BTC per byte, resulting in an average transaction cost of approximately $8.50 each.
Ordinals Make Their Comeback
There has been a significant increase in fees, resulting in over 162,000 Ordinals inscriptions being made every day on Thursday, which is more than double the average of 90,280 per month. At the same time, the daily spending on inscription fees hit a record high of $1.24 million in the past month.
Most network fees for routine transactions remained manageable. However, there are concerns that the volume of on-chain trading could be increasing in preparation for the upcoming Bitcoin halving event. This event is expected to reduce Bitcoin’s inflation rate by half within approximately a week.
For the past few weeks, I’ve been observing the Bitcoin transaction fees and they have noticeably increased once more. It seems that Bitcoin fees could surpass Ethereum fees for the first time in 2024. The upcoming Bitcoin halving event might trigger this shift.
On April 19th, the activation of the “Runes” protocol on Bitcoin isn’t only about halving. This is a new token standard developed by Casey Rodamor, the creator of Ordinals. Similar to BRC-20 tokens, there are predictions that trading these tokens at their launch could lead to fees exceeding $30.
“Muneeb Ali, CEO of TrustMachines, posted on Twitter on Monday that the launch of Runes at Bitcoin’s halving will initiate memecoin trends in the Bitcoin market. With increasing fees and high activity on Layer 1 (L1), all paths lead towards Bitcoin’s Layer 2 solutions.”
The Incoming Bitcoin Fee Wave
Bitcoins have generally not used tokens throughout most of its existence, but it’s likely they will become popular once they are introduced.
Approximately 18 months ago, Ordinals introduced NFTs on Bitcoin and have since made it the go-to blockchain for NFT trading, surpassing Ethereum‘s popularity. On a recent Thursday, Bitcoin recorded a 24-hour NFT trading volume of $28 million, while Ethereum reported only $9 million in such transactions, according to CryptoSlam.
From a positive perspective, steep fees linked to Ordinal transactions boost miners’ earnings, as they are tasked with maintaining the security of the Bitcoin system. Following the halving event, miners will see their rewards diminished by half. Consequently, they would need increased transaction fees to compensate for this reduction in rewards and maintain their profits.
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2024-04-12 01:56