Since the launch of Bitcoin (BTC) next Ordinals NFTs, the sector has recorded substantial growth. Bitcoin Ordinals have ascended to the second position in terms of NFT volume, leaving most competitors behind. This dominance rise has brought forth questions about its impact on the broader Bitcoin sector.
NFT Data
According to Dune Analytics, there were 10 million BRC-20 tokens when the article was written, which constitutes more than 1% of all Bitcoin transactions. The escalating popularity of these NFTs indicates an increased interest in digital collections and unique blockchain-based assets. Despite the dominance of Ordinal transactions on Bitcoin, the volume of Ordinal transactions occurring in marketplaces had significantly decreased. This decline could reflect a shift in user behavior, with NFT trading activity moving to other platforms or projects beyond traditional marketplaces. This change necessitates further exploration to understand the reasons behind it and analyze the evolving dynamics of the NFT market.
Mining Data!
Furthermore, miner revenue saw a significant reduction according to Glassnode data. Notably, while the total daily production cost was $18.3 million, the miner revenue reached $24.9 million, providing an estimated net profit of $6.6 million. The decreased miner revenue underscores the need for miners to adapt to changing market conditions and optimize their mining strategies. Additionally, the miner difficulty also increased. The increased miner difficulty can adversely affect miners by making mining more challenging and resource-intensive.
As the miner difficulty rises, miners might need to invest in more powerful and efficient mining hardware to compete effectively. This could result in higher operating costs for miners, as upgrading their equipment and investing more in electricity consumption may become necessary. The high difficulty also decreases the probability of miners successfully mining new blocks, which can reduce the frequency of their block rewards.
If miner revenue continues to fall, miners might be forced to sell their assets. This could negatively affect BTC’s price in the long run. The selling pressure from miners could lead to a downward price movement, influencing market sentiment and potentially triggering more selling by other market participants.
