Bitcoin Boom: Why the King Coin is Heading for the Stratosphere

• Bitcoin’s blocks are reaching maximum capacity with NFT-based Inscriptions causing concerns of a speculative bubble.
• Miner revenue has been declining while hashrate increases, leading to increased competition among miners and centralization concerns.
• The number of Bitcoin holders on exchanges is increasing, showing an interest in acquiring and holding BTC.

Congestion in Bitcoin Blocks

Bitcoin’s blocks are reaching their maximum capacity due to the introduction of Non-Fungible Tokens (NFTs) based Inscriptions, raising concerns of a speculative bubble. According to Messari, this congestion has historically occurred during periods of speculation in the Bitcoin market when transaction demand exceeds network capacity.

Declining Miner Revenue & Increasing Hashrate

The volume of Ordinals being traded across exchanges had declined as reported by Dune Analytics, which may have repercussions for miner revenue. Blockchain.com’s data revealed that miner revenue decreased from $41.744 million to $26.178 million over the past month. Additionally, the hashrate of Bitcoin has seen an upward trend during this period, leading to increased competition among miners and centralization concerns.

Growing Interest Amongst Holders

Glassnode conducted an evaluation of cumulative Bitcoin holdings on three leading cryptocurrency exchanges over the past three years and found significant growth in Bitcoin balances held by Binance and Bitfinex, with notable increases across all three platforms since April 2021. This suggests that there is a growing interest amongst holders to acquire and hold BTC despite market volatility.

Conclusion

As the blocks fill up with Inscriptions due to the rise of NFTs, it remains uncertain what effect this will have on BTC’s future price. Although miner revenue is declining at present alongside an increasing hash rate leading to increased competition amongst miners and potential centralization issues, overall there appears to be a growing interest amongst holders in acquiring and holding BTC regardless of market conditions