The 14-day exponential moving average (EMA) of the number of transactions taking place on the bitcoin network reached its highest level since April 2021 earlier this month, according to data from crypto analytics firm Glassnode. The 14-day EMA of trading recently passed 300,000, analysts and cryptocurrency market commentators recently posted. Bitcoin nft protocol is called ordinals,
According to the crypto derivatives firm bitmexas 7th As of February, over 13,000 simple NFTs have been directly Bitcoin The blockchain takes up 526MB of block space and is associated with a cost of 6.77 BTC (worth about $150,000 at current prices).
Direct deployment of simple NFTs Bitcoin The blockchain has been controversial, with some claiming that it goes against pseudonymous bitcoin creator Satoshi Nakamoto’s original vision of the bitcoin blockchain being used solely for financial purposes. Whether you agree with the existence of bitcoin-based NFTs or not, they are making their mark on the network.
So could the Ordinals result in a massive increase in network activity that benefits the price of bitcoin?
bitcoin network fee not affected yet
Some analysts and commentators have expressed concern that the existence of generic NFTs, which has resulted in many bitcoin blocks reaching the 4MB limit, could put upward pressure on network fees. However, according to Glassnode data, there hasn’t been a significant increase in network fees yet.
Some have argued that if common NFTs lead to an increase in bitcoin network fees, this could be good for miners, thus representing a long-term positive for the security of the bitcoin network. However, given that fees haven’t picked up yet, bitcoin miner revenue remains subdued relative to recent history. Glassnode’s 4-year Z-score of minor revenue fees remains close to its low, which is stuck since July 2021.
How General NFT Bitcoin Network Activity Can Affect BTC Price
With simple NFTs having had minimal impact on network fees so far, it can probably be assumed that the new, controversial protocol’s impact on BTC price has been minimal so far. Meanwhile, although it has increased transaction traffic, the ordinals do not appear to have had any effect on the number of unique daily users of the bitcoin blockchain.
Glassnode’s 14-day EMA of active addresses, which the firm defines as “the number of unique addresses that sent or received that day”, stood at about 940,000 as of 8.th In February, close to the range it has remained at for over a year and a half.
New Addresses Momentum, another indicator of network activity tracked by analysts at Glassnode, has been sending positive signals lately. But this positive trend started back in Q4 2022 when the collapse of FTX kicked off fresh yearly lows in the price of bitcoin, which 1) encouraged users to delist their crypto from exchanges for the first time (meaning a lot of new ) wallet creation and 2) attracted new users who wanted to buy Dip.
The 30-day simple moving average (SMA) of new addresses rose above the 365-day SMA of new addresses in early November, and has remained above it since then.
So it seems as though the advent of bitcoin NFTs via the Ordinals protocol has not yet had enough of an impact on bitcoin network activity and adoption to affect the cryptocurrency’s price. But this is a fairly new technology and its ultimate impact on the bitcoin network remains to be seen. Bitcoin investors, regardless of their feelings towards bitcoin-based NFTs, should watch this space.
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