Bitcoin Halving Impacts BRC-20 Tokens, Traders Shifting to Bitcoin Runes
Summary:
Ahead of the Bitcoin halving, BRC-20 tokens Ordinals and Sats witnessed a plunge of over 40% on the weekly chart. In contrast, the daily sales volume of RUNE BRC-20 tokens saw a massive 4500% surge, suggesting traders are shifting toward Bitcoin Runes, a new token standard on Bitcoin that simplifies fungible token creation. Despite this surge, the researcher Ignas predicts that the actual market opportunity for Runes may only emerge months after the initial investor hype decreases. The Internet Computer Protocol (ICP) plans to integrate Runes to permit ICP smart contracts to interact with Runes and BRC-20 tokens, expanding possibilities for holders.
In the days leading up to the Bitcoin halving, Ordinals (ORDI) and Sats (SATS), the two highest-market capitalization BRC-20 tokens, experienced over a 40% drop on the weekly chart. Following this, traders are redirecting their attention to Bitcoin Runes, a novel token standard on Bitcoin that simplifies the process for users to produce fungible tokens.
ORI's value dipped by more than 42%, and SATS by over 45% within the week, according to CoinMarketCap data. Sales of BRC-20 tokens, too, have been on a decline, with PUPS BRC-20 decreasing by 30% to $1.4 million and WZRD BRC-20 by 63% to $1.1 million in the last 24 hours.
In contrast, the daily sales volume of RUNE BRC-20 tokens soared by over 4500% to $251,000, indicating a shift in traders' focus to Bitcoin Runes. Over the last week, PUPS BRC-20 and WZRD BRC-20 tokens were the second and third biggest collections by sales volume respectively across all blockchains.
The increasing interest in Bitcoin Runes, a recent tool for issuing fungible tokens on the Bitcoin network, is being credited to its upcoming launch set to coincide with Bitcoin halving scheduled for later this week.
However, the actual market potential for Runes may only come to fruition several months after the initial investor hype dies down, says Ignas, a decentralized finance researcher going under a pseudonym, stating the market might cool off soon.
Post Bitcoin halving, Rune prices could suffer a severe hit considering they don't instantly enhance the trading experience for BRC-20 tokens and because soaring Bitcoin transaction fees will push small traders out of the market.
Ignas also predicts several Runes to debut on the market, scattering trader attention and capital inflows. Coupled with the initial lack of utility of the Runes, this could position them as memecoins, according to Ignas.
However, Runes could gain incremental functionality, making Ignas "bullish" on Runes in the long term. The Internet Computer Protocol (ICP) has plans to incorporate Runes, which will authorize ICP smart contracts to work with Runes and BRC-20 tokens directly on Bitcoin's base layer, thereby opening up more avenues for holders. ICP's efforts are a part of a new wave called Bitcoin DeFi, or BTCFi, which aims to create more utility around BTC and Bitcoin-related assets.
Published At
4/18/2024 7:37:00 PM
Disclaimer: Algoine does not endorse any content or product on this page. Readers should conduct their own research before taking any actions related to the asset, company, or any information in this article and assume full responsibility for their decisions. This article should not be considered as investment advice. Our news is prepared with AI support.
Do you suspect this content may be misleading, incomplete, or inappropriate in any way, requiring modification or removal?
We appreciate your report.