In a surprising turn of events, Bitcoin transaction fees have recently surpassed those of Ethereum, driven by a surge in Ordinals-related activity. Ordinals, a protocol for inscribing data onto the Bitcoin blockchain, has witnessed a renewed surge in popularity, leading to a spike in transaction fees.
On November 20, the average daily transaction fee for Bitcoin stood at $10.34, while Ethereum’s transaction fees averaged just $8.43, according to BitInfoChart data. This marks a significant shift from the previous trend, where Ethereum transaction fees typically exceeded Bitcoin’s.
Bitcoin Fees Soar Amid Ordinals Popularity
The recent surge in Bitcoin transaction fees can be attributed to the increasing popularity of Ordinals-based assets. Ordinals allow users to create and inscribe non-fungible tokens (NFTs) and BRC-20 tokens onto the BTC blockchain. This has led to a surge in demand for block space, driving up transaction fees.
BTC’s average daily trading fee reached a new six-month high on November 16, peaking at $18.67, while Ethereum fees reached $7.90. This further highlights the impact of Ordinals on BTC’s transaction fees.
The renewed interest in Ordinals can be traced back to late October, following a period of lull in activity between September 25 and October 23. Since October 24, over 6 million Ordinal assets have been created, resulting in more than 800 BTC in fees – worth $30 million – being redistributed to the network.
Several factors have contributed to the resurgence of Ordinals. The listing of ORDI, the second largest BRC-20 token by market cap, on Binance on November 7 spurred a wider wave of BRC-20 buying activity, further fueling the demand for Ordinals. Additionally, the announcement of a $7.5 million seed round for the Ordinals-based project Taproot Wizards on November 17 added to the momentum.
The surge in Ordinals activity and the resulting increase in Bitcoin transaction fees highlight the growing popularity of this technology. While the long-term impact of Ordinals remains to be seen, it has undoubtedly captured the attention of the cryptocurrency community and is likely to continue shaping the BTC ecosystem in the months to come.