Bitcoin's network congestion soars as Ordinals dominate transaction activity

Bitcoin network activity has reached near record levels. The surge follows a 2025 decision by Bitcoin Core developers to remove data limits on the OP_RETURN feature, which has allowed more information to be embedded in transactions. The rise in activity is largely driven by Bitcoin Ordinals, a method for encoding arbitrary data into transactions. These low-value transfers now make up roughly 80% of daily network activity. The trend began in 2023 when Ordinals first appeared, causing a spike in usage, fees, and storage demands.

The network’s mempool has since grown to around 128,000 transactions, the highest since February 2025. This congestion has pushed CryptoQuant’s Bitcoin Network Activity Index into positive territory for the first time since 2024. The growing demand reflects a shift towards using Bitcoin as a data layer, not just a payments system.

Small, data-heavy transactions are now competing for limited block space. This competition is driving up fees for standard financial transfers. In May 2023, mining revenue surged to $916.6 million, partly due to the increased activity. The network is now handling unprecedented transaction volumes. Fees for conventional transfers may continue to rise as data-heavy activity dominates. The trend signals a broader change in how Bitcoin is being used.