Was Bitcoin Runes already high?

Block 840,000, produced on April 19, 2024, was unique to Bitcoin (BTC). The world's largest blockchain also marked the launch of the Runes protocol, which is currently the most popular way to generate tokens on Bitcoin, in addition to making its fourth halve.

While token creation is common on blockchains such as Ethereum (ETH) or Solana (SOL), this practice is relatively new to Bitcoin, becoming popular only in 2023. Signs on the Runes protocol – launched in April – is more recent.

Over the past 15 years, traditional media have declared Bitcoin dead many times. Similarly, tokens created on the Runes protocol are considered dead by some critics.

Related: Runes protocol sparks new era for Bitcoin after halving

Looking at the daily trading volume of these assets, as well as the number of new entries, you can feel that Runes has already reached its peak. But given the history of premature announcements about the end of Web3 assets, it's worth asking if that's true.

The first thing to consider is the macro context. Since the launch of the Runes protocol, Bitcoin has remained in a channel between approximately $60,000 and $70,000.

During this period, the dominance of all crypto market assets – altcoins – remained practically sovereign, indicating a certain market caution to take more risks.

This directly affects the interest in Runes standard tokens. Although they reside in Bitcoin, they fall into the category of “altcoins” which are not currently attracting widespread interest from the market.

However, as the Roman emperor (and Stoic philosopher) Marcus Aurelius said: “Focus on what you can't control.” It is important to analyze only how the ecosystem of Runes is developing.

Quality of Runes Tokens

Almost all tokens created on the Runes protocol to date are meme coins. Besides being one of the main narratives of 2024, they are simple and easy to create. Therefore, it is expected that the Bitcoin blockchain will initially be populated with meme coins, rather than being tied to strong tokennomics or large-scale applications, as the market has not had time to create such things.

Among all the memories created, the main one is the DOG token. The success of the DOG token is due to a fair start and a strong simple narrative: the Bitcoin Dog Token.

For years, dog-themed tokens have ruled the meme coin market across networks, and now Bitcoin has a dog to call its own.

DOG currently represents 40% of the total market capitalization of Runes tokens – worth around $600 million – and is held by more than 70,000 chain owners. The dominance also shows the growth potential of the sector.

Dogecoin (DOGE), the world's largest meme coin, still outperforms Bitcoin's top dog token by 28 times and more than 10 times the entire value of the Runes token ecosystem.

Infrastructure evolution

Since asset allocation in Bitcoin started to become popular in 2023, the infrastructure with them has been a major conflict.

In addition to wallets that support these types of assets not being very popular in the Ethereum or Solana ecosystem, Bitcoin lacks smart contracts – making it difficult to create decentralized exchanges (DEXs) and marketplaces, for example. This makes trading Bitcoin assets interesting compared to assets on other networks.

RELATED: Rushing OP_CAT on Bitcoin May Cost Huge Security Costs

Some major players see this as a good challenge and opportunity. By betting on these new Bitcoin assets, Magic Eden – for example – has taken on a new life after losing its relevance to Solana.

Another player giving good energy to the space is OKX, which has an on-chain marketplace exclusively for Runes assets.

Now the next major market consideration is to create a journey similar to a decentralized exchange like Uniswap or Jupiter. Although there is no clear prediction that this will happen, it can be said that the infrastructure is being built at an accelerated pace for a type of property that did not exist three months ago.

Others accepted the narrative.

In addition to local players and on-chain developments, centralized exchanges are also slowly adopting Runes' standard assets. Leading these listings is the DOG token, which already has spot listings on Gate.io and MEX and perpetual listings on Baybit and KuCoin.

It is worth emphasizing that the Runes protocol is less than three months old, and listing Runes tokens on an exchange requires the exchange to update its infrastructure. That's why smaller exchanges have moved faster – and larger exchanges will follow.

That, even in an indifferent market, has very interesting developments that show that the ecosystem of Runes is far from its growth stage.

Even if the “alt season” never came, the Runes ecosystem has a strong narrative – and it stands out in the market.

This article is not intended for general information purposes and should not be construed as legal or investment advice. The views, ideas and opinions expressed herein are solely those of the author and do not necessarily represent the views and opinions of Cointelegraph.