Bankless: Can the Bitcoin Rune Fever Sustain?

Author: David C, Bankless; Translator: Baishui, Golden Finance

Runes, a new protocol for minting fungible tokens on Bitcoin, has lived up to expectations, at least initially. Are runes a short-lived fad, or can they usher in a new future for Bitcoin and its transaction volume?

The launch of runes brings a historic shift as the halving approaches. For the first time, the transaction fees generated by miners in a single day exceeded the block reward. On the day of the launch, miners earned $80.74 million in fees alone, far exceeding the block reward of $26.28 million.

Rune tokens are attached to Bitcoin’s UTXO (unspent transaction output) rather than individual satoshis, making them potentially integrated with the Lightning Network or other Bitcoin L2s in the future.

The rapid growth in fees has been largely driven by the rapid popularity of Rune.

In just two hours after going live, the network saw about 53,000 Rune-related transactions, significantly increasing the network’s normal traffic and pushing average transaction fees to nearly $130, more than double the record set during the peak of the last bull run.

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

Soon after the launch, Runes trading volume dropped to around 30% of all Bitcoin activity, and high-priority transaction fees dropped to around $11. Udi Wertheimer believes that while the initial success of Runes may boost the level of other former Runes tokens such as Runestones, Prometheans, PUPS and WZRD, which are considered strong candidates for future CEX listings, this momentum may take longer than expected to begin.

Looking forward, it may be wise to hold top Ordinals such as Bitcoin Puppets, NodeMonkees, and Runes, as their market position makes them likely to attract future Rune airdrops. While Bitcoin DeFi, NFTs, and L2 are likely to continue to be one of the hot topics of this cycle, the best move now may be to wait and see Runes, especially how they perform in the coming weeks.