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Crypto's Bitcoin Runes Fever

The Halving-tied launch did numbers, but will traders stick around?
David C David C Apr 22, 20242 min read
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market analysis Crypto's Bitcoin Runes Fever

Runes launch. The launch of Runes, a new protocol for minting fungible tokens on Bitcoin, did live up to the hype, at least initially. Are Runes a short-lived fad, or could they usher in a new future for Bitcoin and its fee volumes?

Arriving with the halving, the launch of Runes brought about a historic shift. For the first time, transaction fees generated by miners in a single day exceeded the block rewards. On release day, miners earned $80.74M from fees alone, significantly overshadowing the $26.28M from block rewards. 

Runes tokens are attached to Bitcoin's UTXOs (Unspent Transaction Outputs) rather than individual satoshis, allowing them to potentially be integrated with the Lightning Network or other Bitcoin L2s in the future. 

The immediate popularity of Runes largely drove an otherworldly surge in fees. 

Within just two hours after launch, the network saw ~53,000 Runes-related transactions, significantly increasing the network's usual traffic and pushing average transaction fees to nearly $130 — more than double the previous record set during the peak of the last bull market.

Despite the initial frenzy, Runes transaction volume and fees have normalized. 

Shortly after the launch weekend, Runes transactions dropped to about 30% of all Bitcoin activity, with high-priority transaction fees reducing to around $11. Udi Wertheimer believes that, while the initial success of Runes could potentially elevate other pre-Runes tokens like Runestones, Prometheans, PUPS, and WZRD, which are considered strong candidates for future CEX listings, it may take longer than expected for this momentum to begin.

Going forward, holding top-tier Ordinals like Bitcoin Puppets, NodeMonkees, and Runestones could be a smart move, as their market status makes them likely to attract future Runes airdrops. While Bitcoin DeFi, NFTs, and L2s will most likely continue to be one of the top narratives of this cycle, the best move now may be to wait and see how Runes, and which Runes, in particular, hold up over the next few weeks before diving in.

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David C

Written by David C

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David is a writer/analyst at Bankless. Prior to joining Bankless, he worked for a series of early-stage crypto startups and on grants from the Ethereum, Solana, and Urbit Foundations. He graduated from Skidmore College in New York. He currently lives in the Midwest and enjoys NFTs, but no longer participates in them.

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