Two Surprising Drivers
Miner Diversification:
Publicly listed Bitcoin miners have seen an influx of investment, expanding beyond exclusive Bitcoin mining. Entities like Core Weave and Hut 8 now venture into AI-focused models, utilizing GPUs and building versatile data centers. Demirors notes that Bitcoin's ecosystem isn't the sole demand for mining, chips, or data centers, benefitting from the broad capital availability due to the AI narrative.
BTC Ordinals' Emergence:
The rise of BTC ordinals, akin to Ethereum's ERC-20 tokens, stands as the second significant factor. Demirors highlights the unprecedented activity on Bitcoin, hitting record-high hash rates. This surge results in increased fees, surpassing block rewards for miners, promising a potentially lucrative revenue stream for the future.
Bitcoin's current value stands at $42,724, marking a nearly 60% surge from its early October 2023 trading at $27,000.
CoinShares' strategist, Meltem Demirors, identifies two unexpected drivers behind Bitcoin's recent surge - diversification in mining investments towards AI and the emergence of BTC ordinals. These factors, leading to increased hash rates and fees, indicate promising revenue prospects for miners.
The unexpected shifts driving Bitcoin's recent success challenge conventional forecasts, showcasing a dynamic and evolving landscape within the crypto sphere.