Key Points
- Bitcoin Runes, a new token-issuing protocol on the Bitcoin network, is set to launch with the upcoming Bitcoin halving.
- The real market opportunity for Runes may only emerge months after the initial investor hype subsides.
The Bitcoin network is preparing to introduce a new protocol called Bitcoin Runes, which will be launched in line with the Bitcoin halving event scheduled for later this week.
However, according to an anonymous decentralized finance (DeFi) researcher known as Ignas, the true market potential for Runes might not be realized until several months after the initial wave of investor excitement dies down.
The Impact of Runes on the Market
Ignas suggests that the market could cool off in a similar fashion to the NFT frenzy post-JPEG reveal. He predicts that Rune floor prices might see a significant drop, primarily due to their lack of immediate impact on the trading experience of BRC-20 tokens and the rising Bitcoin transaction fees that could deter small traders.
Runes and BRC-20 tokens are both new fungible token standards designed to enhance the utility of Bitcoin in the emerging field of Bitcoin decentralized finance (BTCFi).
In a recent research report, asset management giant Franklin Templeton also acknowledged the rise of Runes and the success of other Bitcoin-native fungible token standards such as Ordinals.
Future Expectations for Runes
Ignas anticipates the launch of hundreds of Runes in the market, which could dilute trader attention and inflow into specific tokens. Coupled with the initial lack of utility around Runes, these factors could lead to them being traded like memecoins, similar to BRC20s.
Despite a bearish short-term outlook, Ignas remains optimistic about the long-term prospects for Runes.
Runes could also contribute positively to the development of Bitcoin layer-2 (L2) networks. According to Andre Serrano, product and partnership manager at Stacks, the increasing Bitcoin network fees could drive more activity to Bitcoin L2 networks as smaller transactions get priced out.
Stacks, a Bitcoin L2 network, is also gearing up to launch a trading solution for Runes, BRC-20s, and Ordinals inscriptions.