The ‘real opportunity’ for Bitcoin Runes comes after the initial investor hype.
Bitcoin Runes, a new protocol for issuing funnel tokens on the Bitcoin network, is set to be halved in Bitcoin this week.
However, the real market potential of Runes may come only months after the first wave of investor enthusiasm subsides, according to anonymous decentralized finance (DeFi) researcher Ignas, in an April 17 X post:
“Runestone, RSIC, and PUPS are already blowing up, promising owners of shiny new Rune token airdrops. And the FOMO threads continue. However, as NFT's crazy post-JPEG shows, the market may soon cool down.
Rune's floor price is likely to be significantly lower, as BRC-20 tokens have not immediately improved the trading experience and small traders may opt out of the rising cost of Bitcoin transaction fees, according to the anonymous researcher.
Runes and BRC-20 tokens are both new Funko tokens.
Asset management giant Franklin Templeton has also acknowledged the emergence of Runes. The asset manager noted the success of other Bitcoin-native fungible token tiers like Ordinals in an April 3 research report:
“Bitcoin Ordinals has seen an increase in trading volume over the past several months. This was reflected in its increasing dominance in December 2023 when trading volume surpassed ETH.”
Bitcoin surpassed 65 million tokens on April 11, less than a year and three months after its launch in January 2023.
Ignas expects to launch hundreds of Runes on the market, which will attract the attention of traders and enter into special symbols.
Coupled with the lack of initial utility around Runes, these aspects make them similar to the memecoin business, according to the pseudo-researcher who wrote:
“Ultimately, resource-wise runes will be traded as memecoins like BRC20s. At least initially, so the thrill of ‘new' is lost. Especially if no rune token can sustain the pump and digits lose money.
Despite the short-term view, Ignas notes that he is bullish on Runes in the long run.
“If I'm right, the real chance will come after the rune protocol starts and the boost cools down.”
Related: BTCFi is a ‘huge opportunity' to make Bitcoin a productive asset – stack
Bitcoin Runes will move more activity to BTC Layer 2s
Runes can be a net positive for the growth of Bitcoin layer-2 networks. According to Andre Serrano, product and partnership manager at Stacks, who spoke to Cointelegraph, with standard articles, they could drive more activity to Bitcoin L2 networks.
“There will be a lot of property supply in this case [Bitcoin] L1, which includes transaction fees […] This costs a lot of users and activities […] Finally, it will be important to push this activity to L2s.
The Bitcoin L2 network stack is preparing to launch a commercial solution for Runes, BRC-20s and Ordinals texts.
Related: Bitcoin supply will run out in 9 months – Bybit
