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 potential for Runes might only emerge several months after the initial wave of investor frenzy subsides, as stated by Ignas, a pseudonymous decentralized finance (DeFi) researcher, in an April 17 X post. According to Ignas, the floor prices of Runes could experience a significant decline due to their inability to immediately enhance the trading experience of BRC-20 tokens and the possible exclusion of small traders due to rising Bitcoin transaction fees.
Runes and BRC-20 tokens are both innovative fungible token standards that aim to provide more utility for Bitcoin in the realm of Bitcoin decentralized finance (DeFi), or BTCFi for short. The emergence of Runes has also been acknowledged by Franklin Templeton, a prominent asset management firm. In an April 3 research report, the asset manager highlighted the success of other Bitcoin-native fungible token standards, such as Ordinals. It was noted that Bitcoin had surpassed 65 million Ordinals inscriptions on April 11, less than a year and three months since its launch in January 2023.
Ignas anticipates the launch of numerous Runes in the market, which could dilute trader attention and investments into specific tokens. Coupled with the lack of initial utility surrounding Runes, these factors might lead to Runes being compared to memecoins in terms of their trading nature, according to Ignas.
Despite the bearish short-term outlook, Ignas remains bullish on Runes in the long run. Additionally, Runes could have a positive impact on the development of Bitcoin layer-2 networks. Together with Ordinal inscriptions, Runes could drive more activity to Bitcoin layer-2 networks, as the increasing Bitcoin network fees could deter smaller transactions. Andre Serrano, the product and partnership manager at Stacks, shared with Cointelegraph that the Bitcoin layer-2 network, Stacks, is also preparing to launch a trading solution for Runes, BRC-20s, and Ordinals inscriptions.
In related news, Bybit predicts that Bitcoin supply on exchanges will run out in nine months.