Bitcoin Runes, a revolutionary protocol for issuing fungible tokens on the Bitcoin network, is scheduled to launch alongside the highly anticipated Bitcoin halving event later this week.
However, industry experts believe that the true market potential for Runes may not be fully realized until several months after the initial hype from investors dies down. In a recent X post, the pseudonymous decentralized finance (DeFi) researcher Ignas explained that the floor prices for Runes could experience a significant drop. This is primarily due to the fact that they do not immediately enhance the trading experience of BRC-20 tokens and the rising transaction fees associated with Bitcoin may deter smaller traders from participating.
Both Runes and BRC-20 tokens are novel fungible token standards designed to increase the utility of Bitcoin within the emerging Bitcoin decentralized finance (DeFi) landscape, also known as BTCFi. The emergence of Runes has not gone unnoticed by major asset management firm Franklin Templeton. In a research report published on April 3, the firm acknowledged the success of Bitcoin-native fungible token standards like Ordinals. As of April 11, Bitcoin had surpassed 65 million Ordinals inscriptions, less than a year and three months since its launch in January 2023.
Ignas predicts that the market will soon be flooded with hundreds of Runes, resulting in a dilution of attention and investment into specific tokens. Combined with the lack of immediate utility offered by Runes, this may lead to speculative trading reminiscent of memecoins.
Despite the short-term bearish outlook, Ignas remains optimistic about the long-term potential of Runes. Additionally, Runes could have a positive impact on the development of Bitcoin layer-2 networks. Alongside Ordinal inscriptions, Runes could drive more activity to these networks as higher Bitcoin network fees render smaller transactions less cost-effective. Andre Serrano, the product and partnership manager at Stacks, expects that Runes will drive more activity to the Bitcoin layer-2 network. In fact, Stacks is currently preparing to launch a trading solution for Runes, BRC-20s, and Ordinals inscriptions.
In related news, Bybit recently reported that the supply of Bitcoin on exchanges is expected to run out in the next nine months. This further highlights the growing interest and demand for Bitcoin and its associated token standards like Runes, BRC-20s, and Ordinals inscriptions.