The Bitcoin ordinal inscription craze is back, and network transactions are surging as a result. On May 1, on-chain analytics provider Glassnode reported that daily transactions were approaching peak levels.
The 30-day moving average for the metric had reached 348,700 daily transactions. Furthermore, the peak level was measured in 2017 when it reached 379,000 transactions per day on average.
However, these figures are taken from moving averages. According to Blockchain.com, the actual daily transaction count spiked to 426,814 on April 30. It has increased by more than 70% since the beginning of the year.
The spike in network transactions has been attributed to ordinal inscriptions. According to Glassnode, inscriptions represent approximately 30% to 40% of mined transactions and 10% to 20% of fees paid.
The remaining majority are monetary transactions, often via exchanges, it added. “BTC exchange activity is, however, relatively low, accounting for ~30% of fees and transactions,” it noted.
Bitcoin ordinal inscriptions are crypto assets similar to non-fungible tokens (NFTs), which can be inscribed into one Satoshi. The Bitcoin SegWit and Taproot updates enabled ordinal users to add 3MB of data to each block from the original constraint of 1MB per block.
The inscription craze originally took off in February when users began inscribing NFTs to satoshis, the recent revival has been dominated by text-based inscriptions, however.
Glassnode concluded:
“Bitcoin transaction counts, address activity, Inscriptions, and Mempool congestion are all elevated. As is the degree of HODLing, and supply acquired below $30k. Conviction remains.”
In late April, crypto asset manager Grayscale also reported on the ordinals craze. It noted that the “unexpected surge in popularity may indicate a shift in the broader perception of Bitcoin, despite its reputation as an ossified blockchain.”
Bitcoin prices have started to decline from their weekend plateau of around $29,300. As the Monday morning Asian trading session commenced, BTC fell a couple of percent to an intraday low of $28,300, according to CoinGecko.
The asset has fallen to its lowest price since last Thursday’s panic sell-off. Further losses could result in a fall to support just over the $28,000 level.
BTC remains down 58% from its peak price levels in November 2021, and the correction could well deepen before there is any transition to a bull cycle.