Bitcoin Fees Spike to 2-Year High as Ordinals Bonanza Gives Windfall Profit to BTC Miners
Share prices of publicly listed bitcoin mining companies are 'on fire' thanks to high transaction fees, one analyst said.
Bitcoin Fees Surge to Highest Level in 2 Years
Bitcoin network fees surged to over $37, the highest since April 2021 as Bitcoin NFTs called Ordinals surge in popularity.
The average price of transactions on the Bitcoin blockchain surged over $37 Sunday, a level last seen in April 2021, at the height of the bull market peak, data by BitInfoCharts shows, up from an average of $1-$2 in September and early October.
The surge is mainly driven by the resurgence of Ordinals, a protocol that allows users to store non-fungible tokens (NFTs) on the Bitcoin blockchain called inscriptions.
Windfall Profit for Bitcoin Miners
Bitcoin (BTC) miners enjoy windfall profits as transaction fees spiked to the highest since April 2021 due to rising Ordinals inscriptions.
Users created over 1.2 million new Ordinals inscriptions from Friday to Sunday, according to a Dune Analytics chart by crypto asset management firm 21.co, clogging the network with some 300,000 transactions waiting for confirmation.
The popularity of Ordinals have divided the Bitcoin community, with core developer Luke Dashjr calling them 'spams' in need of fixing. However, sky-high fees have proved a boon for BTC miners.
Bitcoin Mining Stocks Outperform BTC Price
Bitcoin mining stocks have also outperformed BTC price recently, Thielen added. While BTC is up 7% in December, mining stocks such as Marathon Digital (MARA), Riot Platform (RIOT) and Cleanspark (CLSK) rallied 15%-40% during the same period.
Caleb Franzen, founder of Cubic Analytics, noted that BTC mining stocks may also benefit from a strong performance of the equity markets.
'Bitcoin miners have continued to perform well over the past several trading sessions, despite stagnation in the underlying price of BTC price,' he posted on X. 'It's a ripple effect from strong & broad-based equity performance.'
