Market Trends for November-December 2023
As 2023 draws to a close, analysis in the "Bitcoin Price" analysis suggests that the recent surge in Bitcoin's price is not due to the Bitcoin ETF but rather the $800 billion US Treasury bonds introduced by the US Department of the Treasury. This injection of funds has provided liquidity to the market.
The latest updates also indicate that Bitcoin ETFs will not redeem Bitcoin in physical form but in US dollars. The holders of Bitcoin will gradually become large institutions, which will have a significant impact on Bitcoin's price and, to some extent, maintain its stability.
Due to this influence, Bitcoin's price is expected to experience high volatility in December.
Ethereum, suffering from narrative fatigue and lacking significant innovation, saw a price retreat in DeFi, NFT, and related projects after a brief 21-day surge. Retail investors' funds shifted from the Ethereum ecosystem to Bitcoin ecosystem projects. BRC-20 and ARC-20 have garnered more attention, and Ethereum's ETHS, which mimics BRC-20, also saw a certain degree of price increase due to the positive sentiment around BRC-20.
What Are the Differences Between BRC-20, ARC-20, and ETHS?
BRC-20 is the first standard to use bitcoin UTXO to mint NFT. The protocol is the Ordinals protocol. Its major value is simplifying the coin issuance process significantly, making it considered a replacement for Meme tokens by using ETH smart contract.
Atomical Standard used some fundamental ideas of BRC-20, added more elements, and improved the security. In addition to coin issuance and NFT minting on Bitcoin, it also enables DeFi and Gamefi on the Bitcoin chain. Atomical is considered a more practical standard. ARC-20 is a protocol similar to Ordinals. The major issue with Atomical is that after the release of the ARC-20 protocol, its development is left to the community without sufficient funding, which can result in slower progress and potential missed opportunities. The biggest difference between ARC-20 and Ordinals is that the minting process for ARC-20 involves mining, requiring CPU or GPU power. According to the latest data, minting one ARC-20 inscription requires 12 hours of a home computer's time. Many ARC-20 token players choose to purchase directly rather than mint due to this. This, to some extent, gives ARC-20 an advantage over Ordinals. However, liquidity is the key to whether the price rises, and without capital intervention, the token price of ARC-20 depends entirely on how holders perceive the token.
ETHS is a protocol similar to Ordinals launched on Ethereum after Ordinals. It has followed the same practices as Ordinals, with the main difference being coin issuance on Ethereum. Ethereum has natural advantages such as faster transaction speed than Bitcoin, support for smart contracts, and improved scalability after upgrades. Therefore, when Gas Fees for BRC-20 reached 40U, ETHS also saw a price increase.
Which Token Is Worth Investing in: BRC-20, ARC-20, or ETHS?
When determining price trends, 30% depends on token value, while 70% depends on liquidity. Ethereum's weakness, complexity of fiat, and the community gradually accepting BRC-20 Ordinals coin issuance instead of the traditional Ethereum Meme tokens have led to a surge in BRC-20 token prices. However, the surge is not in tokens similar to Ordi or SATS but rather in those new community-issued tokens.
Due to the community's adoption of BRC-20, Bitcoin transaction fees started rising from the 17th. Preliminary calculations suggest that minting a BRC-20 inscription (inscriptions are collections of tokens in the Ordinals protocol) currently costs up to 40U at a minimum. This fee, similar to Gas Fees, is paid to miners and is referred to as BTC's Gas Fee. Miners prioritize order processing based on higher fees, and those queuing may fail to mint due to the limit on the number of inscriptions, with Gas Fees not being refundable.
As a result, some players have paid Gas Fees of up to 200 USD equivalent in BTC to quickly mint an inscription in recent times. With market FOMO sentiment, Gas Fees could reach levels equivalent to 1000 USD in BTC, similar to Ethereum's NFTs in the early days.
Among the current Bitcoin ecosystem, BRC-20 has attracted the most funds.
ARC-20's top token, $ATOM, is fluctuating at a high level, and its price may decline due to the prominence of BRC-20.
ETHS is on Ethereum, where Gas Fees are currently around 1 USD. So it has also seen some increase along with BRC-20.
Other Bitcoin-based standards similar to BRC-20 are not well-regarded because the differences at a fundamental level are not significant. Lack of liquidity makes them highly speculative and riskier.
Investment Strategies for BRC-20, ARC-20, and ETHS
BRC-20 is Undoubtedly the Hottest Right Now
The community's frenzy in coin issuance is evident. The main challenge with BRC-20 is that it requires support from centralized exchanges (CEX). Without CEX support, inscriptions cannot be traded as regular tokens. For tokens with a relatively high unit price, liquidity is significantly restricted.
Therefore, the best investment strategy for BRC-20 tokens is to trade those that will be listed on CEX. Currently, there are three exchanges that support tokens being traded as tokens: Binance, OKEx, and BingX. BingX has the fastest listing speed for BRC-20 tokens among the three exchanges.
BRC-20 tokens listed on BingX have experienced a 40% increase in value. So, focus on tokens that are about to be listed on BingX.
Risks with BRC-20 tokens: Since they are Meme tokens, there may be selling pressure after minting. Community support and active communities are critical factors in the minting process of BRC-20, so never mint BRC-20 inscriptions solely due to FOMO.
Most BRC-20 tokens may go to zero due to lack of community and liquidity, and there is a risk of going to zero.
Based on past patterns, the frenzy of Meme tokens often signals the end of a bullish trend. BRC-20 tokens could experience significant price drops at any time due to Bitcoin's decline.
Adopt a Wait-and-See Approach for ARC-20 Tokens
Because the technology is still in development, Atomical standard tokens carry high risks. If there is no constant influx of funds, Atomical standard tokens can face significant selling pressure. The presence or absence of funds accounts for 70% of the token price.
Short-Term Investment in ETHS Protocol Tokens
Currently, only ETHS tokens seem suitable for short-term investment. Long-term risks are higher because when the hype around BRC-20 projects fades, ETHS prices may plummet.
Considering the current trend where many Meme tokens are entering the BRC-20 sphere, it is estimated that the BRC-20 hype will continue until the end of December.
BRC-20 Tokens Coming to BingX
The process of listing BRC-20 inscriptions and listing BRC-20 tokens on an exchange is significantly different. Each inscription contains a specific number of tokens, and this number remains the same during minting. If, during minting, 10,000 tokens were minted in one inscription, then when selling, one can only choose to sell 10,000 tokens at a time.
Listing BRC-20 tokens allows the creators of inscriptions to deposit the tokens with a specific quantity into a CEX and enables Takers to purchase them using a matching mechanism. For example, some traders (Takers) may choose to buy 100 tokens, which can be executed instantly on a CEX. Furthermore, inscription trading is similar to a DEX, requiring Gas Fees and waiting for transactions to be executed, while CEXs use a matching system that is almost instantaneous and doesn't require Gas Fees.
CEXs provide better liquidity for BRC-20 tokens. BingX has partnered with Unisat, and tokens with strong communities will be listed on BingX CEX. This means that BRC-20 tokens set to be listed on BingX will have a certain wealth effect.
It's important to note that BRC-20 tokens come with risks, and investing in them may result in a complete loss of capital. Users must conduct thorough research (DYOR). The above content does not constitute any investment advice and is for educational and reference purposes only. BingX will never take any responsibility for lose of investment