Bitcoin Ordinals: Bitcoin Price and Transaction Fee Rate Predictions
Ordinals, a method for creating unique digital assets on the Bitcoin blockchain, has significantly impacted the blockchain over the past year, yet there is a notable lack of research on it. This study is the first to demonstrate that Bitcoin Ordinals-related data are crucial features for predicting...
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| Main Authors: | , , , |
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| Format: | Article |
| Language: | English |
| Published: |
IEEE
2025-01-01
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| Series: | IEEE Access |
| Subjects: | |
| Online Access: | https://ieeexplore.ieee.org/document/10883948/ |
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| Summary: | Ordinals, a method for creating unique digital assets on the Bitcoin blockchain, has significantly impacted the blockchain over the past year, yet there is a notable lack of research on it. This study is the first to demonstrate that Bitcoin Ordinals-related data are crucial features for predicting Bitcoin transaction fee rates and prices. Our main contributions are threefold. 1) Dataset Construction: We construct a dataset that includes Bitcoin chain data, Ordinals index data, and Ordinals market data, as well as a dataset excluding Ordinals-related data. Our findings reveal that the fluctuation in the number of Ordinals inscriptions tends to correlate with market activity. When the Ordinals market is active, the share of Ordinals inscribed fees and the average Bitcoin transaction fee rate remain high. We argue that the upgrades of SegWit and Taproot drove the creation and development of Bitcoin Ordinals. Combined with users’ interest in Ordinals, this in turn affected the Bitcoin blockchain and its price; 2) Prediction: Using three metrics (MAE, RMSE, and MAPE) and the TemporalFusionTransformer model as a baseline, our comparative experiments show that Bitcoin Ordinals-related data is essential for predicting Bitcoin transaction fee rates and prices. This finding aids investors and participants in the Bitcoin Ordinals market in avoiding losses and leveraging congestion-related arbitrage opportunities, thus enabling more accurate decision-making in the cryptocurrency market; 3) Chronos Model: Additionally, the fine-tuned Chronos model achieves metrics comparable to or better than those of the TemporalFusionTransformer for shorter time intervals, especially in low-noise environments. With its outstanding zero-shot prediction performance, fast execution, and easy cloud deployment, the Chronos model allows investors and market participants to quickly obtain high-quality predictions without requiring complex data features. |
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| ISSN: | 2169-3536 |