The latest Bitcoin halving has taken place, and its impact is apparent as the price has risen by more than 3% following the event – a potential indication of greater expansion in contrast to previous halvings.
In the past, cryptocurrency halvings have resulted in varying responses in the short term, but generally point towards a positive outlook in the long term. However, it’s important to keep in mind that there aren’t many historical occurrences to base this assumption on firmly.
During the weekend following Bitcoin‘s halving event, there was a notable increase in transaction fees rather than price, which was unexpected. The average Bitcoin network fee reached an astonishing high of $146, dwarfing Ethereum‘s comparatively low $3 fee. This surge took the community by surprise, although there had been some early warnings.
Reason behind fees
In the background, a significant portion of the fee increase can be explained by recent developments in Bitcoin’s blockspace. The introduction of the Runes protocol, designed to make it easier to create tokens on Bitcoin, came after the Ordinals protocol and triggered increased demand for space on the blockchain.
The two procedures entail recording information on Bitcoin blocks much like producing Non-Fungible Tokens (NFTs), leading to increased competition for block space and subsequently higher transaction costs.
Additionally, the introduction of Runes may have significantly contributed to the rise in fees. The craze for securing block space resulted in increased transaction costs on the network. Consequently, fee levels experienced noticeable fluctuations during the weekend.
In spite of the recent fee adjustments, Bitcoin’s perpetual swap funding rates remained fairly stable, indicating that market opinion has not strongly favored or opposed the price trend. Although open interest has decreased from its March high, it remains significantly above $10 billion.
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2024-04-23 16:34