Bitcoin, the world's first and most widely used cryptocurrency, has recently seen a surge in daily transactional activity with the arrival of Bitcoin Request for Comment (BRC-20) tokens on its 'Ordinals' protocol.
In a recently released data report, Dune Analytics revealed that the daily inscriptions (known as Ordinals) made on the Bitcoin (BTC) network had reached an all-time high (ATH) on April 2, 2021, with 58,179 transactions recorded, a whopping 83.5% higher than the last ATH at 31,692 recorded on March 9.
The increase in transactions is believed to be driven by the recent release of BRC-20 tokens, a "token standard" designed to deploy token contracts, mint tokens and transfer tokens on the Ordinals platform. Proponents of the project, such as Dan Held, suggest it offers more financial use cases on Bitcoin, while others argue that it's straying away from the original vision of Bitcoin as a peer-to-peer cash system.
The BRC-20 tokens, which are similar to Ethereum's ERC-20 tokens, were enabled by the Taproot soft fork released on Nov. 14, 2020. So far, over 1,600 tokens have been created since the launch, while over 55,000 of the inscriptions on April 2 can be attributed to text-based Ordinals, most likely BRC-20 tokens.
The project has become increasingly popular as new tools used to interact with BRC-20 tokens have been released in the last few days, including Ord.io, UniSat Wallet, and BRC-20.io. This has resulted in the creation of many different types of tokens with some, such as 'pepe', 'ordi', and 'punk' receiving a market cap of $2.5 million, $2.1 million, and $900,000 respectively.
While the total market cap of BRC-20 tokens currently stands at below $10 million, digital asset investment firm Galaxy Digital suggests it could reach as high as of $4.5 billion by 2025.
In summary, Bitcoin's recent daily ATH in inscriptions is believed to be driven by the influx of BRC-20 tokens on the Ordinals protocol and their popularity among the community. While opinions remain divided on the long-term effects of the project, the potential of BRC-20 tokens to accelerate the financialization of Bitcoin is clear and the market cap is expected to continue to increase over the years.
Christopher Wood
- 2023-04-03
Bitcoin's ATH Surge: The Potential of BRC-20 Tokens
Bitcoin recently saw an upsurge in daily transactional activity with the arrival of Bitcoin Request for Comment (BRC-20) tokens on its 'Ordinals' protocol. In the following article, we discuss the potential of the BRC-20 Tokens and the potential for Bitcoin's financialization in the years to come.
