One week before the halving, the Bitcoin network is faced with another wave of hot demand, with some coming from a now familiar source: Ordinals traders.
As of Thursday, data from mempool.space shows that Bitcoin users are paying over 90 sats/vByte of block space, placing the average cost of a transaction at $8.50 apiece.
The surge in fees has corresponded with an uptick in daily Ordinals inscriptions, which tallied over 162,000 on Thursday compared to a monthly average of 90,280. Meanwhile, the “daily inscription fee spend” reached $1.24 million, its highest level in the past month.
The vast majority of network fees were contained to regular transactions, however. Some suspect that on-chain trading activity is ramping up in advance of the Bitcoin halving, which will cut Bitcoin’s supply inflation rate in half within roughly one week.
“Been monitoring Bitcoin fees for the past few weeks now, and they are starting to rise again meaningfully,” wrote CryptoSlate lead analyst James Van Stratten to Twitter on Thursday. “Bitcoin hasn’t flipped Ethereum fees in 2024; I think they might soon. Halving may be the catalyst.”
It’s not just the halving, either: on April 19, the “Runes” protocol will be activated – a new token standard on Bitcoin invented by Ordinals creator Casey Rodamor. Much like BRC-20 tokens before them, some expect that their trading activity at launch could drive fees to over $30 each.
“Runes launch at Bitcoin halving will begin memecoins on Bitcoin season,” tweeted TrustMachines CEO Muneeb Ali on Monday. “As L1 breaks with insane fees and activity, all roads lead to Bitcoin L2s.”
Tokens have been foreign to Bitcoin for the bulk of the network’s lifespan, though there’s reason to believe they’ll immediately gain traction when introduced.
For instance, Ordinals ushered in NFTs on Bitcoin less than 18 months ago, and have already turned the network into the most popular blockchain for NFT trading, surpassing Ethereum. On Thursday, Bitcoin’s 24-hour NFT trading volume tallied $28 million, versus Ethereum’s $9 million, according to CryptoSlam.
On the bright side, high fees from Ordinals drive up revenues for miners – the entities responsible for securing the Bitcoin network. The halving will naturally cut the bulk of miners’ rewards in half, requiring higher network fees to make up the difference for their bottom line.