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Bitcoin Halving Impact on Ordinals and BRC-20 Tokens
We are on the verge of the Bitcoin halving event, coinciding with the launch of the Runes fungible token standard, leaving collectors on the top chain questioning the relevance of the NFT-like Ordinals inscriptions on the chain and the fate of BRC-20 tokens built on the Ordinals protocol.
Unlike Ethereum’s transition back in late 2022, concerns about the future of on-chain Bitcoin assets are unwarranted following the halving. The halving denotes the periodic reduction in mining rewards, leading to a decreased influx of new BTC into the market and typically resulting in a price surge.
Block production will persist post-halving, ensuring that Ordinals inscriptions and BRC-20 tokens will remain in your wallets without any required action from your end. The pivotal question revolves around the demand for Bitcoin-related assets and how the introduction of the new Runes token protocol will influence interest in BRC-20 tokens.
Forecasting Demand and Price Surge
Recently, Ordinals have experienced a surge in demand, with NFT trading volume surpassing Ethereum’s long-standing dominance. This shift has elevated cross-chain marketplace Magic Eden to a prominent position, with Ordinals collections offering impending Runes token drops to holders, such as Runestone, experiencing a significant uptrend.
The continuity of this momentum post-halving remains ambiguous. However, DappRadar’s Senior Communications Manager, Robert Hoogendoorn, anticipates a favorable scenario with Ordinals and other Bitcoin-based assets profiting from projected BTC price surges down the line.
Conversely, certain well-known Bitcoin tokens like ORDI and SATS have witnessed declining demand in recent weeks, surpassing the depreciation experienced by Bitcoin and several other cryptocurrencies.
The Runes Protocol and Its Implications
The introduction of the Runes protocol, acclaimed as a more efficient variant of Bitcoin-based tokens, introduces a potential economic transformation within the blockchain industry, propelled by its creator Casey Rodarmor, the brains behind the Ordinals protocol.
While the BRC-20 token standard served as an experimental venture grounded in his protocol, the distinct touch of Rodarmor in Runes could elevate the platform’s significance in the realm of Bitcoin assets, resonating with discerning collectors and investors.
Elizabeth Olson, head of growth at the Bitcoin wallet startup Xverse, envisions Runes mirroring or even surpassing the success of BRC-20 tokens in light of Rodarmor’s innovative vision.
Impact on Ordinals and Asset Scarcity
The impending Runes protocol launch at the halving promises a phase of prolonged high fees for Bitcoin, affecting the Ordinals protocol landscape in various ways. The increase in on-chain file inscription costs will prompt artists to adopt creative strategies in file space utilization.
Furthermore, the implementation of the Runes protocol might inject fresh assets into the Bitcoin blockchain, potentially amplifying existing asset values and scarcity, as highlighted by Leonidas, a pseudonymous NFT historian and Runestone project co-creator.
Ken Liao, the founder and CEO of Xverse, echoes concerns about escalating fees affecting the Ordinals ecosystem and agrees on the broader implications of heightened demand for Bitcoin assets post-halving, influenced by scarcity dynamics.
Ensuing Exclusivity and Scarcity
As fees and asset prices surge, there is a discernible trend towards exclusive ownership within the Bitcoin asset realm, impacting accessibility for potential participants and elevating the prestige associated with such assets.
Speculations point towards a potential migration to Bitcoin layer-2 scaling networks to counter rising transaction fees, potentially segregating Bitcoin assets into a more exclusive domain, per CryptoSlam founder and CEO Randy Wasinger.
Ultimately, as the blockchain industry anticipates the Bitcoin halving and the advent of the Runes protocol, the landscape remains poised for transformations that could reshape the dynamics of Bitcoin-based assets and redefine the narrative surrounding Ordinals inscriptions and BRC-20 tokens.
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