Optimism surrounding a potential spot Bitcoin ETF approval and the rising popularity of Bitcoin ordinals inscriptions has led to a rise in transaction fees on the network, which surpassed fees on Ethereum for the first time since 2020.
According to data from Crypto Fees, Bitcoin transaction fees reached a daily high of $11.6 million, outpacing the $5.6 million in daily transaction fees recorded by Ethereum over the same period.
However, on a weekly basis Ethereum transaction fees stands at around $8.3 million, while Bitcoin averaged $7 million in fees.
Read more: BlackRock CEO Larry Fink Calls Bitcoin an ‘International Asset’ that Could ‘Revolutionize Finance’
Still, the shift in daily metrics potentially implies a change in current market dynamics, especially when taking into account the factor at which Bitcoin fees have risen over the last few weeks.
In the last 24 hours, Bitcoin generated $11M in transaction fees.
That is twice what Ethereum did, and up 20X from the amount it was generating two weeks ago.
All it took was a little magic from the @TaprootWizards pic.twitter.com/zp6OOh0gUB
— Mippo 🟪 (@MikeIppolito_) November 19, 2023
“It gets even better when you look under the hood. Transaction fees (which need to grow for the network to be sustainable) are now 25% of miner revenue. That’s the highest it’s been in a long, long time,” said Michael Ippolito, co-founder of Blockworks, on X.
Read more: Bitcoin Is Finishing Out 2023 as More Valuable Than the Rest of the Entire Crypto Ecosystem
While some market participants attribute the surge in Bitcoin network activity to the price action surrounding a potential spot Bitcoin ETF approval on the horizon, others, including Ippolito, believe that a renewed interest in ordinal inscriptions was responsible for most of the activity.
BREAKING: Ordinals inscriptions made up 57% of Bitcoin transactions in the past 24 hours driving up fees to a 5 month high of 205 sat/vB.
Ordinals are the #1 use case on Bitcoin right now. pic.twitter.com/lVvNZIG2uV
— Leonidas $DOG 🧡 OKX (@LeonidasNFT) November 9, 2023
Congested mempools and high levels of transaction fees are usually a deterrent to user growth, but surprisingly, on-chain data shows that this hasn’t been the case this time around.
Data from IntoTheBlock shows that the Bitcoin adoption rate reached a yearly high of 67.62% last week.
The new adoption rate of Bitcoin reached a yearly high of 67.62% this week. This metric shows the percentage of active addresses that are newly created and in this case, indicates a surge in new market participants.
🔗https://t.co/jrHO8NOmtI pic.twitter.com/kwYJhjmPYv— IntoTheBlock (@intotheblock) November 17, 2023