• Bitcoin’s (BTC) 60% year-to-date surge may be only the first milestone in its upward journey, as miner revenues from transaction fees are rising.
• The two-year “Z-score” for miner revenue from fees, an indicator used to identify periods of high and low transaction fees, has turned positive for the first time since mid-2021, according to data source Glassnode.
• A return of high fees has historically coincided with the beginning of major bull runs.
Bitcoin Miners’ Revenue From Fees Rises Suggesting Onset of Major Bull Run
Positive Z-Score Indicates Return of High Fees
The two-year “Z-score” for miner revenue from fees has turned positive after a long time, signaling new waves of adoption. This indicator is used to identify periods of high and low transaction fees and usually turns positive during bull runs while being negative during bear runs. According to data source Glassnode, this is the first time since mid-2021 that this score has been positive which suggests miners’ revenue from transaction fees is deviating higher from the two year mean in a sign of increased network demand.
Historical Correlation Between High Transaction Fees and Bull Runs
The return of above-average fees on the Bitcoin network points to a bull market ahead. Historically, there has been a correlation between high transaction fees and the beginning of major bull runs. As such, Bitcoin’s (BTC) 60% year-to-date surge may be only the first milestone in its upward journey as miners’ revenues from transaction fee increase.
Analysis From Lead Analyst at Glassnode
Glassnode’s lead analyst James Check commented on this trend saying: “Bolstered by a new demand from Ordinals and Inscriptions, the 2yr Z Score for miner revenue from fees has turned positive”. He added: “Elevated fee pressure is a common precursor to more constructive markets, coincident with new waves of adoption expressed via increasing demand for blockspace”.
The Z score turning positively could be an indication that we can expect more constructive market conditions ahead due to increased demand for blockspace driven by adoption waves which will coincide with higher than average transaction fee rates on the Bitcoin network.
• Bitcoin has retreated to below $25,000 after reaching a nine- month high on Tuesday.
• Altcoins continue to rally, with stacks (STX) taking the lead and IMX token for Immutable X surging 30%.
• Binance.US’ deal to buy the assets of bankrupt crypto lender Voyager Digital for $1 billion is put on hold while key legal objections are ironed out, following an appeal by the U.S. Trustee.
Bitcoin Falls Back to Below $25K
Bitcoin has retreated back to below $25,000 after reaching a nine-month high on Tuesday at about $26,500. Following the release of the United States Consumer Price Index which showed that inflation rate is slowing down, altcoins continue to rally with stacks (STX) taking the lead and IMX token for Immutable X surging by 30%.
Binance US Deal Put On Hold
Binance.US’ deal of buying assets from bankrupt crypto lender Voyager Digital for $1 billion has been put on hold while legal objections are ironed out by authorities. The move follows an appeal from U.S. Trustee which is concerned that deal would absolve Voyager and its staff from potential liabilities arising from fraudulent activity or negligence in managing customer funds .
Mood Among Clients
Franklin Templeton President and CEO Jenny Johnson will discuss developing crypto-linked investment products in a bear market and her long term view on where markets are headed as well as client sentiment towards digital assets during this period of volatility..
CoinDesk Market Team
The article was written by CoinDesk Markets reporter Lyllah Ledesma currently based in Europe who holds bitcoin, ether and other small amounts of crypto assets as well as senior reporter Omkar Godbole who follows current moves in crypto markets in context every day through CoinDesk’s daily newsletter First Mover..
This article provides insight into latest price moves in cryptocurrency markets along with current news stories related to developments within these markets such as Binance US’s proposed acquisition of Voyager Digital’s assets being put on hold due to legal objections raised by U.S. Trustee branch of Department of Justice and Franklin Templeton President Jenny Johnson discussing developing crypto-linked investment products amid bear market condition along with her long term view regarding cryptocurrencies and sentiment among clients towards digital assets during this period of volatility..
• U.S. lawmakers are planning on reintroducing a bill that will reform the way crypto is treated for tax purposes.
• The Keep Innovation in America Act would narrow the definition of a crypto broker for tax purposes and help create more innovation in the sector.
• The current reporting requirements are hindering innovation in the crypto sector, and this bill aims to provide solutions.
U.S. Lawmakers Reintroduce Crypto Tax Reform Bill
What is the Keep Innovation in America Act?
The Keep Innovation in America Act is a bill introduced by U.S. Rep Patrick McHenry (R-N.C.) and Ritchie Torres (D-N.Y.) that would narrow the definition of a crypto broker for tax purposes to “any person who (for consideration) stands ready in the ordinary course of a trade or business to effect sales of digital assets at the direction of their customers.”
Why Was This Bill Introduced?
Lawmakers believe that current reporting requirements are hindering innovation within the crypto sector, so they want to put forward this reform to encourage further development within this space and shift its development outside of United States borders if needed.
Who Does This Affect?
This bill affects miners, validators, and custodians who currently have to adhere to standards incompatible with blockchain technology’s operation due to existing reporting requirements under current law.
What Are The Benefits Of This Bill?
The benefits of this bill include increased innovation within the US cryptocurrency sector, as well as shifting its development outside US borders if needed which could lead to economic growth within countries that use cryptocurrencies as well as those who develop them overseas.
The Keep Innovation in America Act has been introduced with hopes of reforming how cryptocurrencies are taxed in order to encourage more innovation within this space and potentially shift its development from US borders if necessary which could lead to economic growth both domestically and abroad.