According to IntoTheBlock, a chain analysis provider, Bitcoin network transaction fees, paid to miners to include a transaction in the next block of the Bitcoin Blockchain, have reached a new peak in 2023. Data reveals that these fees have surged by 35 times over the past year. This significant increase is attributed to the Ordinals protocol, which allows users to store Non-Fungible Tokens (NFTs) directly on the Bitcoin Blockchain.
Since December 2022, the average daily transaction fees have increased 35-fold, benefiting Bitcoin miners with higher earnings as fees rise. The Ordinals protocol, which introduced the production mechanism for NFTs known as inscriptions, was launched in January of this year and has brought NFT and smart contract functionalities to the Bitcoin network.
As of December 26th, according to Dune Analytics, there are now a total of 51.72 million inscriptions owned by users on the Bitcoin network. The introduction of Bitcoin Ordinals has been a significant factor in the increased transaction fees.
In addition to reaching new highs in transaction fees, Bitcoin has also been part of what Santiment, another on-chain data platform, believes will be remembered as one of the best-performing years in the last century for various main sectors. Santiment notes that Bitcoin and Ethereum are close to surpassing their highest levels in the last one and a half years, achieved just three weeks ago.
Bitcoin, the largest cryptocurrency, has seen a significant surge, particularly in the last quarter of the year, amid speculations that the U.S. Securities and Exchange Commission (SEC) might finally approve a spot Bitcoin exchange-traded fund (ETF), which would facilitate direct investment into BTC. Current data shows that the altcoin has risen over 160% since the beginning of the year.
Investors are eagerly awaiting the approval of a spot Bitcoin ETF, with a key date set for January 10, 2024. On this date, it is anticipated that the SEC will give the green light to all pending spot Bitcoin ETFs.