Bitcoin and Ethereum, the two leading cryptocurrencies in the market, have experienced a significant shift in their average daily transaction fees. According to data from BitInfoChart, Bitcoin’s average daily transaction fee stood at $10.34 on November 20, while Ethereum’s fees averaged at $8.43. This marks a reversal of their usual positions, where Ethereum typically had higher fees than Bitcoin.
The sudden surge in Bitcoin transaction fees can be attributed to the increasing popularity of assets that utilize the Ordinals Protocol. This tool enables the creation of nonfungible token (NFT)-like assets and BRC-20 tokens on the Bitcoin network. After a period of low activity between September 25 and October 23, there has been a notable uptick in the issuance of Ordinals-based assets since late October, as reported by Dune Analytics. Over 6 million Ordinal assets have been created since October 24, resulting in more than 800 BTC in fees, valued at $30 million, being redistributed throughout the network.
The surge in Ordinals inscription activity was further amplified by the listing of ORDI, the second-largest BRC-20 token by market capitalization, on Binance on November 7. This listing sparked a wave of buying activity from traders, leading to a significant increase in the price of the ORDI token by over 50% in a single day. The listing on Binance also brought more attention and liquidity to the Ordinals-based ecosystem, contributing to the surge in fees on the Bitcoin network.
On November 17, Taproot Wizards, a project utilizing the Ordinals Protocol, announced a successful seed round of $7.5 million. This news further propelled the interest in the Ordinals ecosystem and its associated assets. The successful fundraising round showcased the potential of the project and attracted more attention from investors and traders alike. With increased funding, Taproot Wizards and other Ordinals-based projects have the resources to further develop and expand their offerings, potentially leading to even higher transaction fees on the Bitcoin network.
The recent surge in Bitcoin transaction fees, surpassing those of Ethereum, is a result of the growing popularity of assets utilizing the Ordinals Protocol. The issuance of Ordinals-based assets has seen a significant uptick, resulting in millions of assets being created and substantial fees being distributed across the Bitcoin network. The listing of the ORDI token on Binance and the successful seed round of Taproot Wizards have further strengthened the Ordinals ecosystem and attracted more interest and investment. As the Ordinals Protocol continues to evolve and gain traction, it is likely that Bitcoin transaction fees will remain elevated, potentially impacting the overall network dynamics.