The total market cap of the top 10 Bitcoin-based non-fungible tokens (NFTs), comprising Ordinals and Runes, has surged “to $1.03 billion, with a daily average trading volume of $2.25 million in May 2024, proving their increasing prominence in the world of Web3.” This, according to an extensive update shared by CoinGecko.
The report from CoinGecko noted that this volume is mainly driven by the most popular collections on the chain, such as NodeMonkes, with a market cap of $198.25 million (2,880 BTC) in the month of May 2024, Bitcoin Puppets, with a market cap of $144.12 million (1,815 BTC), and Runestone with a market cap of $87.85 million (1,124 BTC.)
These collections, among many others, also “have shown feats in sales volume, only adding proof to their popularity. NodeMonkes has an average daily volume of $0.52 million, while Bitcoin Puppets has an average daily volume of $0.51 million as of May 2024.”
In terms of user adoption, Bitcoin Puppets has “shown a 15.3% month-on-month growth (3.8k to 6.7k) in unique holders from January to May 2024, while NodeMonkes has shown a 10.1% month-on-month growth (3.8k users to 5.6k) over the same period.”
The CoinGecko report added that this “increase in unique holders has shown that there is indeed increasing interest in the most popular projects in the Ordinals ecosystem.”
An example of this is Runestone, a project which “distributed pieces in the collection to wallets that held three or more Ordinals inscriptions.”
In May 2024, the average number of unique holders “stood at 77 thousand, by far the largest among the most popular projects in the ecosystem.”
While individual NFT sales are still relatively modest “compared to the Ethereum ecosystem, global interest in Ordinals is rapidly rising.”
The CoinGecko report added that Google searches for “Ordinals” hit an all-time high in April 2024, up 58% since January 2024, while Google searches for “Bitcoin NFTs” hit an all-time high in March 2024, “indicating growing interest and adoption in the Bitcoin NFT ecosystem this year.”
While Bitcoin-based NFTs are still lagging behind Ethereum, Solana, and Ronin in terms of sales volume, the statistics show that “the number of buyers of NFTs on Bitcoin are significantly lower than other chains, thus implying that there might be room for growth in terms of user adoption.”
As stated in the CoinGecko report, early adopters of Bitcoin-based NFTs “have also seen fairly significant financial gains if invested at the right time and price.”
For instance, minters who “participated in the Dutch auction-style mint for NodeMonkes (a starting price of 0.21 BTC, with the price dropping by 0.005 every 6 blocks), would have been up 426% if compared with the project’s all-time high of 0.895 BTC or 38% if compared with the average sale price at the time of writing (0.29 BTC).”
Launched by engineer Casey Rodarmor in January 2023, the main way that Ordinals differ from NFTs is that “all the data (whether text, images or smart contracts) of the Ordinal is “inscribed” directly on-chains.”
As such, in the words of its creator, Ordinals are “more akin to digital artifacts than NFTs.”
The CoinGecko report also noted that this “created a lot of appeal for Ordinals as PFP projects and art collections, since all the data is stored on-chain, allowing for an NFT to exist virtually indefinitely.”
As the usage of Ordinals grew, “an anonymous developer from within the community called Domo eventually created a token standard called BRC-20, which was then refined further by Rodarmor to create Runes.”
CoinGecko also mentioned that Runes were “initially created as a means to increase efficiency and solve the issue of excessive unspent transaction outputs (UTXOs). UTXOs are essentially the unspent outputs of past transactions on the Bitcoin blockchain, which users are able to utilize in new transactions.”
Due to the underlying methodology of the protocol, “the widespread adoption of BRC-20 tokens led to a significant increase in UTXOs, contributing to blockchain bloat.”
Runes optimized this process by “identifying and reusing these dormant UTXOs for new transactions, improving efficiency and mitigating network congestion.”
This presents amazing new possibilities “for scalability and improved user experience.”
Having been launched fairly recently, many potential projects and use cases “are likely to emerge using the Runes protocol in the future.”
With its ability to optimize transactions on the Bitcoin network and “enable new levels of efficiency, Runes opens up exciting possibilities for developers to ideate new decentralized applications (DApps), tokenized assets and other novel solutions.”
Methodology
The study examined the data for “the top 10 Bitcoin-based NFT collections as of May 26, 2024 on CoinGecko.com, as well as data from Google Trends as of 31 May, 2024.”
The top 10 Bitcoin-based NFT collections “are NodeMonkes, Bitcoin Puppets, Rune Pups, Ordinal Maxi Biz, RSIC Metaprotocol, Bitcoin Frogs, Runestone, Prometheans, Natcats, and Pizza Ninjas.”
This update from CoinGecko has been co-authored by Tharmaraj Rajandran (@TreezyBreezyNFT)
