Block demand lead to Fee spike as Bitcoin-based Memecoin

Fee spike in Bitcoin-based Memecoins

Bitcoin has reached its ever-highest in two years when the BRC-20, “Bitcoin Request for Comment” tokens are surging in popularity rapidly and the ordinals protocol makes room for block space.

The average transaction fee on the Bitcoin network on Monday in European hours was hovering around $20 and a bump from last week’s average of $1.20 levels. Such levels were seen in May 2021 when the Bitcoin price hit ever highest till now and set a peak record of $60,000.

The one-day spike in activities that mainly consisted of text-based assets led to the number of Non-Fungible Tokens tied to the Bitcoin blockchain surging above $3 million last week, as shown by data from Dune Analytics.

Ordinal Protocol permits users to embed data into the Bitcoin Blockchain by providing the references to digital art into small Bitcoin (BTC) based transactions. The tokens, called inscriptions, function on the ordinal protocol.

A collection of digital artwork and meme tokens built on Bitcoin have spurred because the BRC-20 token standard allows users to issue transferable tokens directly through the network.

About 11,000 tokens issued on Bitcoin are available on the open market as of Monday with a cumulative market capitalization of $1.6 billion, according to data from Ordspace which tracks BRC-20 data.

Till now, tokens of Ordinals Marketplace ordi (ORDI) have a market capitalization of 4220 million and 7,300 unique ordi token holders, and with this, it becomes the most valued BRC-20 token. Ordi is considered as the first BRC-20 token deployed on Bitcoin which will also help its value proposition among holders.

With a $17 million market capitalization, Pepe tokens on Bitcoin, which are different from the ones issued on Ethereum are the second largest BRC-20 issuance.

While some analysts believe that rapid transactional activity is a sign of network adoption that adds to Bitcoin’s fundamental narrative.

Head of Research at ETC Group, Tom Rodgers said that, in 2019, during the peak of Bitcoin, most of the Bitcoin transactions were in the range of $1,000 to $10,000.

This can be concluded as most Bitcoin users were using blockchain for trading. A huge increase in Bitcoin velocity is noted as the largest cohort of Bitcoin transactions 359,560 came from transactions under $1. This also suggests that the amount of Bitcoin transacted by users is increasing rapidly instead of being saved and kept in a locked wallet and held for a long time.

While the adoption has been fleet-footed, the network congestion has flickered for crypto exchanges such as Binance which has to pause Bitcoin withdrawals twice over the weekend.

But on-chain data also shows that Bitcoin has the highest number of unconfirmed Bitcoin transactions seen during the bull runs of 2018 and 2021 which is nearly 415,000 at the writing time on Monday.