Bitcoin surge brings new hope to miners after months of slumping profits
The recent surge in the price of Bitcoin [BTC] has caused a significant shift in mining activity on the BTC network. Pseudonymous CryptoQuant analyst Onchained found that the 68% jump in the year-to-date value of the king coin has resulted in an increase in fees per transaction due to the increased demand for block space.
Unchained noted that the rally in BTC’s price since the year began has led to high network activity on the Bitcoin blockchain. As a result, there has been a surge in demand for block space on the network. And users have had to attach a fee to incentivize miners to prioritize their transactions over others in the mempool, leading to a rise in total miners’ fees.
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On why the demand for block space on the Bitcoin network has rallied significantly recently, the analyst noted:
“It appears that Bitcoin is being withdrawn from exchanges at a rapid pace, which could be the primary reason for the rise in transaction fees. This is likely due to holders who are seeking to keep their Bitcoin safe outside of exchanges. The banking crisis in the USA has led to an increase in the number of people withdrawing their Bitcoins from exchanges. As more people lose faith in the traditional banking system, they are turning to cryptocurrencies as a means of securing their assets.”
Source: CryptoQuant
Another analyst Achraf Elghemri assessed miners’ revenue on the Bitcoin network and found that increased transaction fees on the network caused by the uptick in block space demand have resulted in higher returns for miners.
Elghemri considered BTC’s Puell Multiple Index and found that the total amount of BTC earned by miners to process transactions on the network
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