The income of Bitcoin miners from parties have risen sharply in recent times, partly due to the success of non-fungible tokens (NFTs) on the Bitcoin (BTC) network thanks to Ordinals. Data from Glassnode shows that the two-year Z-score for miner income, an indicator used to distinguish periods of high and low transaction costs, has turned positive for the first time since mid-2021.
Income Bitcoin miners
The Z-score measures the number of standard deviations from the average fee income over two years. During bull markets, this Z-score usually rises and is positive, while in bear markets, it is often negative.
Thus, the recent positive turnaround suggests that miners’ revenue from transaction fees is higher than the two-year average as a sign of increased network demand. Historically, this development coincides with the start of a new bull market.
James Check, an analyst at Glassnode, said in the weekly market update from Glassnode:
“Increased tariff pressure is a common harbinger of more constructive markets, coinciding with new waves of adoption, expressed in increasing demand for blockspace.”
In addition to the block reward, the Bitcoin miner who is allowed to add a new block to the blockchain also receives the transaction costs that are paid. Transactions are processed in blocks, with a maximum of 1 MB of data being stored. Hence, a sudden spike in activity often leads to network congestion – transactions waiting to be verified. In these situations, miners logically focus first on transactions with higher costs.
New BTC bull market?
Recently you could also read in the Bitcoin news that even more indicators have turned green for the start of a new bull market. The bitcoin price has already jumped into the air since the start of 2023, but on chain data now increasingly seems to confirm a bull run.
Examples of such indicators are the number of transactions and the number of new daily addresses. Last week, 309 thousand daily transactions were measured, which has not been this high since April 2021.
In addition, 122,000 new addresses were added to the Bitcoin network daily in the past week, which are amounts last seen in the previous bull run.