Bitcoin transaction fees have reached a six-month high, surging over 2,000% since August, according to BitInfoCharts data. The average fee for a Bitcoin transaction is now around $15.86, up from $0.64 in August.
One of the main factors driving this increase is the renewed interest in Ordinals Inscriptions, a type of digital asset similar to NFTs that are inscribed on a satoshi, the smallest unit of Bitcoin. Ordinal inscriptions had gained popularity earlier this year as a way to create unique and scarce digital collectibles on the Bitcoin network, but their demand faded as the NFT market shifted to other platforms.
Bitcoin’s Ordinals Are on the Rise
However, Ordinals Inscriptions are now experiencing a resurgence after Binance, the world’s largest cryptocurrency exchange, listed their native token, ORDI, on its platform. Since then, ORDI’s price has soared by more than 290% in the last week, according to CoinMarketCap data.
The increased activity around Ordinals Inscriptions has also boosted the number of daily inscriptions on the Bitcoin network, which averaged more than 150,000 again after a brief lull between September and October, according to Dune Analytics data. So far, approximately 39 million inscriptions have been minted, generating 2,346 BTC, or about $85.45 million, in transaction fees.
The surge in transaction fees has also led to a backlog of unconfirmed transactions on the Bitcoin network, with over 150,000 transactions currently waiting to be processed. This may pose challenges for Bitcoin users who want to send or receive payments quickly and cheaply, but it also benefits Bitcoin miners, who earn higher rewards for validating transactions.
While the high transaction fees may indicate a temporary spike in demand for Ordinals Inscriptions, they may also signal a longer-term bullish trend for Bitcoin.
Bitcoin’s realized price, which measures the average cost basis of long-term holders, has outpaced its market price, suggesting that these holders are confident in Bitcoin’s future value and are not selling their coins. This could indicate that the cryptocurrency is undervalued and poised for a breakout.