The miners who power the Bitcoin network, and are still largely incentivized to do so via the printing of new BTC tokens, are benefitting from an uptick in daily network fees, according to data provided by crypto analytics firm Glassnode. At present the Bitcoin network rewards its miners with 6.25 Bitcoins for every block that it mined (about every 10 minutes), though the Bitcoin network also charges a small fee for transactions, which also goes towards miners.
On Tuesday, the seven-day moving average of this fee just reached its highest since early December 2022 at 22.6 BTC. That is substantially above the 365-day moving average of only around 15 BTC. And this uptick in fees is different to the uptick seen in Q4 last year. Last year, Bitcoin owners were scrambling to get their BTC off exchanges in wake of the FTX collapse. The fee uptick coincided with a short-lived rise in network activity and a decline in the BTC price.
This time, the uptick in BTC fee revenues coincides with a rise in Bitcoin’s price since the beginning of the year. According to Glassnode, “a sustained uptick in fee revenue as a proportion of the total reward indicates that Bitcoin blocks are full, and there is growing demand for transaction activity”. “Given the constrained block size of Bitcoin, this has historically provided a valuable early indicator of a macro trend shift in the network demand profile,” they add.
The rise in the BTC-denominated seven-day moving average of daily Bitcoin network fees coincides with a fall in Glassnode’s Bitcoin Fee Ratio Multiple. This multiple is calculated by dividing total miner revenue (which includes newly minted BTC) by daily network fees. When this multiple goes lower, it means a higher percentage of Bitcoin
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