On-chain fees for Bitcoin transactions have surpassed those on Ethereum for the first time in three years.
Photo by Kanchanara on Unsplash
Posted November 20, 2023 at 12:09 am EST.
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.
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.
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 (@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.
— IntoTheBlock (@intotheblock) November 17, 2023