Something unusual occurs on the Bitcoin [BTC] blockchain while the globe waits for the crypto market to recover some pricing enthusiasm. Its hash rate increased significantly, which might be related to Bitcoin ordinals.
Bitcoin’s hash rate at press time was 473.87 EH/s, increasing in the previous 24 hours. This finding was remarkable since it represented not just the greatest weekly hash rate level but also the highest level ever. The fundamental importance of this discovery was that it revealed an increase in miner market involvement.
An increase in Bitcoin ordinals inscriptions most likely caused the increase in hash rate. They have been a major driving force behind organic transactions on the network that are not BTC trading operations. This mirrored a recent rise in Bitcoin daily transactions, which reached a new all-time high on May 1.
More daily transactions equal more income for miners. This explains why Bitcoin’s hash rate rose as miners added additional hash rates to capitalize on revenue-generating possibilities. The miner income metric from Glassnode corroborated this.
On May 1, miner revenue reached a fresh six-month high. If you’re like most people, you’re undoubtedly wondering if Bitcoin ordinals will affect the price of BTC. First, despite increasing transactions, ordinal inscriptions have no direct impact on Bitcoin demand. They would, however, have an impact if Bitcoin miner reserves increased.
A deeper examination of Bitcoin’s on-chain data revealed that the transaction count has recently increased. However, the situation is different for miner reserves, which were at their lowest level in three months at the time of publication.
Dwindling miner reserves are often not seen as a positive indicator for the market. This is because it demonstrates a lack of incentives for miners to hold, which is consistent with market opinion. The decline in miner reserves explains the disparity between the increasing demand for Bitcoin ordinals and the price performance of Bitcoin.
BTC fell by more than 3% on May 1, the same day as the transaction count and hash rate reached fresh highs. Around press time, Bitcoin was trading around $28,592 after achieving some positive volumes. The price action did not show the same excitement as the hash rate or network transactions.