- Bitcoin’s average daily transaction fees have surpassed those of Ethereum, marking a notable change in the fee landscape of major cryptocurrencies.
- This surge in Bitcoin’s fees is linked to the growing popularity of the Ordinals Protocol, which facilitates the creation of NFT-like assets and BRC-20 tokens on the Bitcoin network.
In a noteworthy twist of fate, Bitcoin’s average daily transaction fees have exceeded those of Ethereum, marking a significant shift in the fee dynamics of major cryptocurrencies. This unexpected development is closely linked to the rising prominence of the Ordinals Protocol, a tool that empowers the creation of non-fungible tokens (NFT)-like assets and BRC-20 tokens on the Bitcoin network.
Bitcoin’s average daily fee reached a six-month high on November 16, soaring to $18.67, while Ethereum’s fees remained at $7.90. BitInfoCharts data reveals a distinct uptick in Bitcoin’s fees, surpassing Ethereum’s fees for the first time in several months.
This increase is primarily attributed to the renewed interest in the Ordinals Protocol, which had experienced a period of relative inactivity. The Protocol’s capabilities for creating assets have sparked a surge in transactions and associated fees on the Bitcoin network.
Explosive Growth in Ordinal Inscriptions
Analysis from Dune Analytics underscores the scale of this surge, with over 6 million Ordinals inscriptions added since late October. This influx of asset creation has resulted in more than 800 BTC in transaction fees, equivalent to approximately $30 million, circulating within the Bitcoin network.
The surge in transaction fees was further fueled by significant market events. The listing of ORDI, the second-largest BRC-20 token by market capitalization, on Binance on November 7 triggered a substantial uptick in BRC-20 token trading, with ORDI’s price surging by over 50% following the listing.
Additionally, on November 17, the Taproot Wizards, a project rooted in the Ordinals Protocol, announced a substantial $7.5 million seed round, indicating growing investor interest in Ordinals-based ventures.
This shift in transaction fee dynamics underscores the profound impact of blockchain innovations and market activities on the economics of major cryptocurrencies. The Ordinals Protocol, initially considered a niche application within the Bitcoin ecosystem, has now emerged as a significant catalyst for network activity and fee structures. As the cryptocurrency landscape continues to evolve, these developments emphasize the dynamic and interconnected nature of blockchain technology and digital assets.