The true potential for Bitcoin Runes lies beyond the initial surge of investor excitement.

Bitcoin Runes, a novel protocol for issuing fungible tokens on the Bitcoin network, is scheduled to go live alongside the Bitcoin halving later this week. However, the true market opportunity for Runes may only arise months after the initial wave of investor excitement subsides, according to Ignas, a pseudonymous researcher specializing in decentralized finance (DeFi). In an X post on April 17, Ignas stated that Rune floor prices could experience a significant decline due to the fact that they do not immediately enhance the trading experience of BRC-20 tokens. Additionally, small traders may be priced out of the market due to the rising Bitcoin transaction fees.
Both Runes and BRC-20 tokens are new fungible token standards that aim to increase the utility of Bitcoin within the realm of decentralized finance, also known as BTCFi. Asset management behemoth Franklin Templeton has also acknowledged the emergence of Runes, noting the success of other Bitcoin-native fungible token standards such as Ordinals in a research report published on April 3. The report highlighted that Bitcoin had surpassed 65 million Ordinal inscriptions as of April 11, less than one year and three months after its launch in January 2023.
Ignas, the DeFi researcher, anticipates the launch of hundreds of Runes in the market, which could dilute trader attention and investments in specific tokens. Coupled with the lack of initial utility associated with Runes, these factors may result in them being treated akin to meme coins in trading, according to Ignas. However, despite the bearish short-term outlook, Ignas remains optimistic about the long-term prospects of Runes.
Furthermore, Runes could have a positive impact on the development of Bitcoin layer-2 (L2) networks. Together with Ordinal inscriptions, they could incentivize more activity on Bitcoin L2 networks as the increasing transaction fees on the Bitcoin network make smaller transactions less feasible. Andre Serrano, the product and partnership manager at Stacks, stated that the Bitcoin L2 network is also preparing to launch a trading solution for Runes, BRC-20s, and Ordinal inscriptions.
In related news, Bybit predicts that Bitcoin supply on exchanges will run out within the next nine months.