The recent rallies in Bitcoin (BTC) can be attributed to two key factors, according to Meltem Demirors, the chief strategy officer of digital asset manager CoinShares.
Firstly, there has been a significant influx of capital into publicly listed Bitcoin miners, who are expanding their operations beyond solely mining Bitcoin. Companies such as Core Weave and Hut 8 are venturing into large language models for AI, utilizing GPUs and building data centers to support high-performance computing. This diversification has attracted substantial capital, driven by the AI narrative and the surge in Bitcoin prices.
Secondly, the rise of BTC ordinals, which are akin to Ethereum ERC-20 tokens, has contributed to the increase in Bitcoin’s hash rate. The emergence of Bitcoin NFTs has led to a surge in activity on the Bitcoin blockchain, resulting in record-breaking hash rates and transaction fees that exceed block rewards for miners. This indicates promising future revenue streams for miners.
As of now, BTC is valued at $42,724, marking a nearly 60% increase from its early October 2023 trading price of $27,000. These developments highlight the growing influence of non-fungible tokens (NFTs) and alternative revenue sources in the crypto industry, further solidifying Bitcoin’s position as a dominant player in the market.
