Block 840,000, which was mined on April 19, 2024, held significant importance for Bitcoin (BTC). Not only did it mark the fourth halving of the world’s largest blockchain, but it also marked the launch of the Runes Protocol, which is currently the leading protocol for creating fungible tokens on Bitcoin.
While the creation of tokens is common on blockchains like Ethereum (ETH) or Solana (SOL), it is a relatively new practice for Bitcoin and only gained popularity in 2023. The tokens created on the Runes Protocol, which was launched in April, are even more recent.
Over the past 15 years, traditional media has declared Bitcoin dead multiple times. Similarly, some critics believe that tokens created on the Runes Protocol are already dead.
Looking at the daily trading volume and the number of new entrants, one might think that Runes tokens have already reached their peak. However, considering the history of premature declarations about the end of Web3 assets, it is worth questioning whether this is true.
To understand the situation, we need to consider the macro context. Since the launch of the Runes Protocol, Bitcoin has been trading in a range between $60,000 and $70,000. During this period, Bitcoin’s dominance over other cryptocurrencies, known as altcoins, has remained strong, indicating caution in the market.
This caution directly affects the interest in Runes standard tokens. Although they exist within the Bitcoin ecosystem, they are classified as altcoins and are not currently attracting much interest from the market.
However, as the Roman emperor Marcus Aurelius once said, “Focus on what you can control, not what you cannot control.” It is crucial to analyze how the Runes ecosystem is evolving.
Most of the tokens created on the Runes Protocol so far are meme coins. Meme coins have been a major trend in 2024 and are easy to create. Therefore, it is not surprising that Bitcoin’s blockchain is initially flooded with meme coins rather than tokens with robust tokenomics or tied to large applications.
Among all the memes created, the DOG token stands out. Its success can be attributed to a fair launch and a strong, simple narrative: Bitcoin’s own dog token. Dog-themed tokens have dominated the meme coin market across all networks, and now Bitcoin has its own dog token.
The DOG token currently represents around 40% of the entire market capitalization of Runes tokens, with a value of around $600 million and more than 70,000 on-chain holders. Its dominance highlights the growth potential of the sector.
However, it is important to note that the value of Dogecoin (DOGE), the world’s largest meme coin, still surpasses Bitcoin’s top dog token by 28 times and exceeds the value of the entire Runes token ecosystem by more than 10 times.
One of the challenges in engaging with Bitcoin assets is the lack of infrastructure. Unlike Ethereum or Solana, Bitcoin lacks smart contracts, making it difficult to create decentralized exchanges and marketplaces. This makes trading Bitcoin assets less pleasant compared to assets on other networks.
Despite these challenges, some players are seeing this as an opportunity. Magic Eden, for example, has taken on new life by betting on emerging Bitcoin assets. OKX has also dedicated resources to the space and has an on-chain marketplace dedicated to Runes assets.
The next major market speculation is the creation of a decentralized exchange similar to Uniswap or Jupiter. While there are no clear predictions for this to happen, the infrastructure is being developed at an accelerated pace for a type of asset that did not exist three months ago.
In addition to native players and on-chain developments, centralized exchanges are gradually embracing Runes standard assets. The DOG token, in particular, has already been listed on several exchanges.
Even in an apathetic market, the Runes ecosystem has made significant advances that indicate it is far from reaching its peak. Even if an “alt season” never comes, the Runes ecosystem has a strong narrative and will continue to stand out in the market.