As of March 27, 2024, the price of Bitcoin has been in a volatile market for more than half a month. Although there is a high probability that this year will be a bull market, Bitcoin has entered a short correction period now, and at the same time, the next wave of explosion is brewing.

In the world of web3, the market needs new popular narratives to detonate new wealth hot spots. In this bull market, AI, DePin, Meme and other categories can be said to be popular narratives that have witnessed substantial growth. So in the next wave of bull market, will there be new popular narratives or categories? This brings us to today’s topic: Runes Protocol.

 

What is the Runes protocol?

To explain the Runes protocol, we have to mention the Ordinals protocol first. In short, the Ordinals protocol allows users to directly inscribe text, pictures, videos and other data directly into the Bitcoin blockchain, which means the Bitcoin ecosystem is also able to create its own NFTs. On the basis of the Ordinals protocol, the BRC-20 token standard was also born. Among them, the leading token Ordi also attracted a lot of attention. Its price has increased 10,000x increase since its birth. During the past year, it also achieved a growth of over 150%, and the current price is about $65.

But BRC-20 is not perfect, and it also has some problems of its own. One of the most criticized ones is that BRC20 will produce a large number of UTXOs containing useless information, causing a huge burden on the main network of the Bitcoin blockchain and affecting its scalability. Against this background, Casey, the founder of the ordinals protocol, began to develop a new protocol, and this is Runes.

The Runes protocol is directly based on UTXO model, and the balance of the relevant tokens will be directly stored in UTXO, which avoids the generation of a large amount of junk UTXO like BRC-20. Therefore, Runes can be said to be more efficient in design and has a lower burden on the mainnet of Bitcoin blockchain.

 

Why Runes will lead the next wave of bull market?

Bitcoin price has risen by about 55% YTD, but the good news this year is obviously not over yet. The first is that Bitcoin’s halving moment has not yet arrived (expected to be at the end of April this year), and the Federal Reserve has not yet opened the interest rate cut channel. When these good news are released later this year, the price of Bitcoin will most likely continue to reach new highs.

In the context of Bitcoin's surge, the Bitcoin ecosystem will naturally attract market attention. Then the Runes protocol, as the leader among the Bitcoin-native protocols, is likely to usher in a surge. Its founder Casey even stated publicly: "If the runes ecosystem marketcap doesn't hit one billion dollars within one month of launch, I will commit seppuku."

 

What will the Runes protocol bring to the Bitcoin ecosystem?

Although the Runes protocol will not be released until the end of April this year, its impact on the Bitcoin ecosystem is already self-evident.

Ecological development:

As we have mentioned above, the Runes protocol is undoubtedly more efficient and can also bring better scalability, which may lead to the birth of Defi and other ecosystems based on Bitcoin. As we all know, in the past, Bitcoin has always been unable to breed a blooming ecology like Ethereum due to its scalability limitation. However, with the upgrades such as BRC-20, ARC-20, Runes protocol, etc., Bitcoin ecosystem may give birth to more Defi ecosystems and attract more users in the future.

Wealth growth:

BRC-20 has produced 10,000x coins like Ordi. As its upgraded version, Runes is also likely to give birth to similar tokens, thus amplifying the wealth effect of the Bitcoin ecosystem. At present, the Runes protocol has not yet been officially launched, but there are already many altcoins bearing the name of Rune, trying to attract market funds through hype.

For example, Runestone, a currently popular project, continues to attract market attention through hype. If a careful research is not conducted, many investors may think that the tokens that Runestone will airdrop in the future are the official tokens of the Runes protocol. But in fact, there is no connection between the two because there is no official token of the Runes protocol. To put it bluntly, the tokens that Runestone will airdrop in the future will be issued on the Runes protocol, in an attempt to attract capital inflows by bearing the name very similar to Runes. Of course, this is understandable. After all, Ordi’s surge is also largely due to its name being very close to the Ordinals protocol. Therefore, it is not ruled out that Runestone token will experience a rapid price surge in the short term after the Runes protocol is launched. After all, driven by bull market sentiment, such a thing is very likely to happen.

 

 

Disclaimer

The above content does not constitute any investment advice. Investing in cryptocurrencies is risky, and investing in Pandora tokens and NFTs carries higher risks, possibly resulting in the loss of the entire capital. Investors should conduct their own research (DYOR). BingX is not responsible for any losses incurred from purchasing tokens.