Bitcoin Fees Soar to 2-Year High, Bringing Windfall Profits for BTC Miners

• Bitcoin Network Fees Skyrocket to Over $37 Amid Rising Popularity of Ordinals
• Increasing Transaction Fees: A Boon for Bitcoin Miners
• Average Price of Bitcoin Transactions Surge
• The Resurgence of Ordinals
• Windfall for Bitcoin Miners
• Strong Performance of Equity Markets May Benefit BTC Mining Stocks

Bitcoin Network Fees Skyrocket to Over $37 Amid Rising Popularity of Ordinals

The transaction fees on the Bitcoin$42,260 -0.64% network recently soared past $37, marking the highest rates since April 2021. This increase in fees is primarily due to a surge in popularity of Bitcoin Non-Fungible Tokens (NFTs) known as Ordinals.

Increasing Transaction Fees: A Boon for Bitcoin Miners

The surge in transaction fees is proving to be highly beneficial for Bitcoin miners, who are outperforming despite the range-bound price of Bitcoin (BTC). These miners are experiencing substantial profits owing to the rise in Ordinals inscriptions that led to transaction fees spiking to their highest since April 2021.

Average Price of Bitcoin Transactions Surge

On Sunday, the average price of transactions on the Bitcoin blockchain surged past $37, a level last seen in April 2021, as indicated by data from BitInfoCharts. The price significantly escalated from an average of $1-$2 witnessed in September and early October.

The Resurgence of Ordinals

The significant increase in transaction fees is primarily driven by the rising popularity of Ordinals, a protocol that enables users to store Non-Fungible Tokens (NFTs) on the Bitcoin blockchain. Between Friday and Sunday, over 1.2 million new Ordinals inscriptions were created, as reported by a Dune Analytics chart by crypto asset management firm 21.co. This surge clogged the network with around 300,000 transactions awaiting confirmation.

The rise of Ordinals has sparked a divide within the Bitcoin community. While Bitcoin core developer Luke Dashjr views them as spam that needs addressing, the substantial fees generated have been profitable for Bitcoin miners.

Windfall for Bitcoin Miners

Bitcoin miners, who earn cryptocurrency by processing blockchain transactions, now generate approximately $63 million daily income from fees. This totals to nearly $23 billion annually, almost four times the two-year average, according to a Monday report from 10x Research.

Even though Bitcoin has been range-bound, BTC mining stocks have been performing well due to the high fees generated as noted by Markus Thielen of 10x Research.

Bitcoin mining stocks like Marathon Digital (MARA), Riot Platform (RIOT) and Cleanspark (CLSK) have seen rallies of 15%-40% during the same period, outperforming BTC price, Thielen added.

Strong Performance of Equity Markets May Benefit BTC Mining Stocks

Caleb Franzen, founder of Cubic Analytics, suggested that BTC mining stocks might also benefit from the strong performance of equity markets. He noted that Bitcoin miners have continued to perform impressively over the past several trading sessions, despite stagnation in the underlying price of BTC.

Edited by Jonathan Stoker