Glassnode, a leading cryptocurrency analytics platform, recently tweeted that Bitcoin’s daily transaction counts are approaching all-time highs, and there has been a significant uptick in 2023.
However, with the emergence of inscriptions, analysts are now trying to determine how much of this growth is driven by inscriptions versus monetary transfers.
A closer look at Bitcoin’s mempool reveals a noticeable shift in character this year. The fee pressure during FTX was particularly high, as was the sustained fee pressure throughout 2023. These fee-pressure spikes align with three waves of inscriptions as investors rushed to get in under 1 million.’
Interestingly, there has been a preference shift in inscription types, with over 2.39 million inscriptions added to the Bitcoin ledger, adding 9.3GB in data and paying 212 $BTC in fees.
According to Glassnode, Inscriptions represent approximately 30% to 40% of mined transactions and 10% to 20% of fees paid, with the remaining majority being monetary transactions, often via exchanges.
Exchange Activity & Its Role In Bitcoin Transactions
However, exchange activity for BTC is relatively low, accounting for only around 30% of fees and transactions. Various methods can be used to filter transfer volume on Bitcoin, such as raw unfiltered, change-adjusted, and entity-adjusted.
The thread explains that across all three methods, the volumes remain much lower than the 2021 bull market peaks but are closer to the 2017 peak levels.
To assess the relative scale, the on-chain volume of Bitcoin is compared to its size via the RVT ratio. Higher values suggest that transaction volumes are small relative to market size, indicating that the market may be overvalued. On the other hand, downtrends in the RVT ratio suggest that fundamentals are improving.
Bitcoin’s long-term holder supply is pushing new all-time highs every day, and there has been remarkably little expenditure by investors who bought the FTX lows. HODLers remain in control, but on-chain activity remains light in volume, with inscriptions dominating the scene.
Moreover, Bitcoin transaction counts, address activity, inscriptions, and mempool congestion are elevated, indicating investors’ strong convictions. However, the uptrend remains young, and on-chain volumes have yet to pick up in support.
Nevertheless, Bitcoin’s daily transaction counts are approaching all-time highs, with an explosive uptick in 2023. While HODLers remain in control, on-chain volumes have not yet picked up in support of this uptrend.
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