Why Rising Bitcoin Transaction Fees Could Be a Bullish Sign

Bitcoin's daily transaction fees have surpassed Ethereum's, fueling investor interest in the leading cryptocurrency.

According to CryptoFees data, Bitcoin's daily payout averaged $10.65 million from November 16 to November 18, surpassing Ethereum's average payout of $6.9 million.

BTC transaction fees have increased.

According to data from BitInfoCharts, Bitcoin's average transaction fees rose particularly early this month, rising more than 1,000% to $18.67 on November 16.

This increase reflects the market's growing optimism regarding the approval of a Bitcoin exchange-traded fund (ETF) located in the US. However, the Securities and Exchange Commission (SEC) is still hesitating, delaying decisions on various Bitcoin ETF applications until 2024.

Read more: How to prepare for a Bitcoin ETF: A step-by-step approach

Market analysts also attribute the increase in BTC transaction fees to the revival of formal articles. These digital assets, which are similar to NFTs but in BTC's smaller denomination, satoshis, saw a spike in activity earlier this year, marking Bitcoin's foray into the NFT sector.

As the market waned interest in evolution, there was a resurgence as these assets spread to other blockchain networks such as Polygon and Litecoin.

Bitcoin increasing adoption

Although there are fears that high transaction fees could discourage BTC users, data on the chain shows the opposite trend.

IntoTheBlock reports that Bitcoin adoption reached 67.62 percent this week. This upheaval indicates an increase in newly created active addresses, indicating an influx of new market participants. Additionally, the amount of BTC held by long-term investors is at an all-time high, with more than 1 million addresses owning more than 1 unit of Bitcoin.

Blockchain analytics firm Santiment also reinforces these findings, noting the increase in small wallets of less than 1 BTC.

“Bitcoin wallets fluctuated during this massive market-wide surge. Tons of new small wallets for less than 1 BTC have flooded the network. Meanwhile, the 1-100 level is stretched, and the 100+ level may be in the midst of some profit-taking,” Santiment confirmed.

Jack Mallers, CEO of Stroke, expressed bullish sentiments as he foresees bitcoin's price reaching “hundreds of thousands of dollars”. He emphasized that Bitcoin's price growth is due to innovative technology and financial excellence.

“Bitcoin's value is equal to technology and fiat liquidity. So it's going up because it's new technology and it's better money, but it's shooting at breakneck speed when our government gets into tens of trillions of debt and has to cover it by printing more. Money… Bitcoin is going to go up a lot because it's the hardest to get more,” Mahler said.