Bitcoin transaction fees are on the rise and are expected to climb even higher with the upcoming launch of the “Runes” protocol next week.
A week before the halving, the Bitcoin network is experiencing a surge in demand, notably from Ordinals traders. Current data from mempool.space indicates that Bitcoin transaction fees have reached over 90 sats/vByte, setting the average transaction cost at $8.50.
Renewed Interest in Ordinals
The increase in transaction fees has coincided with a spike in daily Ordinals inscriptions, with numbers hitting 162,000 on Thursday, far above the monthly average of 90,280. Additionally, the daily inscription fee expenditure has soared to $1.24 million, the highest in the last month.
While the majority of network fees are still from regular transactions, there is speculation that on-chain trading is picking up in anticipation of the halving, which will halve Bitcoin’s supply inflation rate in about a week.
CryptoSlate’s lead analyst, James Van Stratten, noted on Twitter, “I’ve been tracking Bitcoin fees for the past few weeks, and there’s a noticeable increase. Bitcoin hasn’t surpassed Ethereum in fees this year, but that might change soon. The halving could be a turning point.”
Moreover, the introduction of the “Runes” protocol on April 19, devised by Ordinals inventor Casey Rodamor, is also expected to impact fees. Similar to the influence of BRC-20 tokens, the trading of these new tokens at launch could potentially push transaction fees above $30 each.
TrustMachines CEO Muneeb Ali commented, “The launch of Runes at the Bitcoin halving will kick off a season of memecoins on Bitcoin. As the main layer becomes congested with high fees and activity, attention will shift to Bitcoin’s layer 2 solutions.”
Anticipating High Fees in Bitcoin’s Network
Historically, tokens are a new concept for Bitcoin, but there’s anticipation they will quickly become popular. For example, the introduction of NFTs via Ordinals less than 18 months ago has already made Bitcoin the leading blockchain for NFT trading, surpassing Ethereum. As of Thursday, Bitcoin’s 24-hour NFT trading volume was $28 million, compared to Ethereum’s $9 million, as per CryptoSlam.
On a positive note, the increase in fees due to Ordinals benefits miners by boosting their revenues. With the upcoming halving set to slash miners’ rewards, these higher network fees will be crucial to sustain their operations.