Bitcoin’s network experienced a significant spike in transaction fees, overtaking Ethereum’s total fees last week, as users competed for block space during a period of high network traffic. The congestion was caused by a combination of factors, including a rally in bitcoin prices that saw the cryptocurrency peak at over $38,500 before settling around $37,000, and a resurgence in bitcoin inscriptions, which increased demand for network capacity.
The rise in transaction fees was notable, with bitcoin miners benefiting from the increased costs. According to IntoTheBlock, Bitcoin collected between approximately $52.6 million and $61 million in transaction fees in the week leading up to today, compared to Ethereum’s approximately $61.5 million, as reported by Glassnode.
The popularity of ordinals, which allow non-BTC tokens to be recorded on the bitcoin blockchain, has played a significant role in the increased fees. This trend has led to a significant increase in block space usage, with the average bitcoin transaction fee reaching $12.96 compared to Ethereum’s average of $7.52 in the week prior to last Monday. However, as transaction activity decreased two weeks prior to last Monday, bitcoin fees dropped to an average of $2.56, while Ethereum’s fees remained higher at an average of $4.94.
The impact of high subscription costs is also reflected in the earnings of mining pools such as FoundryUSA, which reported that over 12% of its total rewards from transaction fees this month can be attributed to these increased costs. This highlights the significant financial impact that network activity and congestion can have on the cryptocurrency mining industry.
