Bitcoin Halving Triggers 40% Drop in BRC-20 Tokens as Interest in Bitcoin Runes Grows
Summary:
Just ahead of the Bitcoin halving, BRC-20 tokens faced significant declines, particularly with Ordinals (ORDI) and Sats (SATS) falling over 40% within a week. Concurrently, there is a shift in trader interest towards Bitcoin Runes, a new token standard for creating fungible tokens. With the Bitcoin halving set to occur this week, it's speculated that the real market opportunity for Runes might only be realized several months afterward. The Internet Computer Protocol (ICP) plans to integrate Runes and BRC-20 tokens directly on Bitcoin's base layer.
Days before the Bitcoin halving, BRC-20 tokens, Ordinals (ORDI) and Sats (SATS), experienced declines of over 40%. Simultaneously, attention is moving towards Bitcoin Runes, a fresh token standard that simplifies the making of fungible tokens on Bitcoin.
These notable falls saw ORDI drop by over 42% and SATS by more than 45% within the week, according to figures from CoinMarketCap. The sales of BRC-20 tokens have also witnessed a decrease, with a 30% fall for PUPS BRC-20 sales to $1.4 million, and WZRD BRC-20 sales plummeting by 63% to $1.1 million, as reported by CryptoSlam – a NFT data aggregator.
On the contrary, daily sales volume of RUNE BRC-20 tokens soared over 4,500% to $251,000, suggesting a shift in trader focus to Bitcoin Runes.
Last week PUPS BRC-20 and WZRD BRC-20 tokens ranked as the second and third-largest collections by sales volume across all blockchains. PUPS gathered over $41 billion in sales volume, and WZRD secured $16.3 million in weekly sales, as pointed out by CryptoSlam.
The growing interest in Bitcoin Runes, a forthcoming protocol for issuing fungible tokens on the Bitcoin network, could be due to its impending launch, which is scheduled to coincide with the Bitcoin halving later in the week.
However, the true market possibility for Runes might not be realized until several months after the initial investor excitement dies down, as suggested by anonymous DeFi researcher Ignas in an April 17 X post.
Ignas anticipates the launch of hundreds of Runes on the market, which could diffuse trader focus and capital inflows. Given the initial lack of Runes utility, this situation could echo the trading of memecoins.
Regardless of these challenges, as Runes gradually gain more functionality, Ignas remains optimistic about their long-term prospects.
The Internet Computer Protocol (ICP) has plans to integrate Runes, enabling ICP smart contracts to directly interact with Runes and BRC-20 tokens on Bitcoin’s core tier. This small step is in line with a new movement known as Bitcoin decentralized finance (BTCFi) that aims to increase the utility around BTC and Bitcoin-native assets.
Readers should note this report does not offer investment advice or recommendations. All investments and trading moves come with a level of risk, and it is suggested that readers conduct their own research before making any decisions.
Published At
4/18/2024 7:37:27 PM
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