Bitcoin Fees Spike to 2-Year High as Ordinals Bonanza Gives Windfall Profit to BTC Miners

Share prices of publicly listed bitcoin mining companies are "on fire" thanks to high transaction fees, one analyst said.

AccessTimeIconDec 18, 2023 at 5:21 p.m. UTC
Updated Mar 8, 2024 at 6:49 p.m. UTC
  • Bitcoin network fees surged to over $37, the highest since April 2021 as Bitcoin NFTs called Ordinals surge in popularity.
  • High transaction fees are a boon for publicly listed bitcoin miners and outperform range-bound BTC price.

Bitcoin (BTC) miners enjoy windfall profits as transaction fees spiked to the highest since April 2021 due to rising Ordinals inscriptions.

The average price of transactions on the Bitcoin blockchain surged over $37 Sunday, a level last seen in April 2021, at the height of the bull market peak, data by BitInfoCharts shows, up from an average of $1-$2 in September and early October.

The surge is mainly driven by the resurgence of Ordinals, a protocol that allows users to store non-fungible tokens (NFTs) on the Bitcoin blockchain called inscriptions.

Users created over 1.2 million new Ordinals inscriptions from Friday to Sunday, according to a Dune Analytics chart by crypto asset management firm, clogging the network with some 300,000 transactions waiting for confirmation.

The popularity of Ordinals have divided the Bitcoin community, with core developer Luke Dashjr calling them "spams" in need of fixing. However, sky-high fees have proved a boon for BTC miners.

Miners, who earn BTC for processing blockchain transactions, now generate some $63 million daily income from fees or $23 billion on an annual basis, almost quadruple of the two-year average, a Monday report from 10x Research noted.

"Despite bitcoin being range-bound, the BTC mining stocks are still performing well and are on fire with extraordinarily high fees being generated," said 10x Research's Markus Thielen, who is also the head of research at Matrixport.

Bitcoin mining stocks have also outperformed BTC price recently, Thielen added. While BTC is up 7% in December, mining stocks such as Marathon Digital (MARA), Riot Platform (RIOT) and Cleanspark (CLSK) rallied 15%-40% during the same period.

BTC price vs. bitcoin mining stocks in December (TradingView)
BTC price vs. bitcoin mining stocks in December (TradingView)

Caleb Franzen, founder of Cubic Analytics, noted that BTC mining stocks may also benefit from a strong performance of the equity markets.

"Bitcoin miners have continued to perform well over the past several trading sessions, despite stagnation in the underlying price of [BTC price]," he posted on X. "It's a ripple effect from strong & broad-based equity performance."

Edited by Kevin Reynolds.


Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk employees, including journalists, may receive options in the Bullish group as part of their compensation.

Krisztian  Sandor

Krisztian Sandor is a reporter on the U.S. markets team focusing on stablecoins and institutional investment. He holds BTC and ETH.