Bitcoin Runes hype fades, transactions plummet 84%

Cointelegraph2024/05/23 08:11

By:Arijit Sarkar

The Bitcoin Runes protocol is struggling to maintain its share of Bitcoin transactions. Since its launch on April 20, Runes transactions have dominated Bitcoin blockchain traffic on eight different days, mostly during the weekends.

The Bitcoin Runes launch coincided with the fourth Bitcoin halving . The resultant hype saw transaction volume shoot up on the Bitcoin blockchain. Revenue from Bitcoin ( BTC ) mining exceeded the $100 million mark for the first time, recording an all-time high daily earnings of $107.7 million .

Users spent $2.4 million in fees to inscribe runes and rare satoshis on the first halving block. Source: Mempool.space

Transactions attributed to the Runes protocol accounted for over 50% of all Bitcoin transactions until April 24. The peak occurred on April 23, when these transactions represented 81.3% of the bandwidth. However, by May 2, this figure had dropped to 11.1%.

Share of Bitcoin transactions by protocol type. Source: Dune Analytics

The Runes hype picked up again the following weekend on May 4, 5 and 6, as shown in the Dune chart above. However, it has trended down since.

As of May 22, Runes represented 12.7% of Bitcoin transactions, much higher than Bitcoin Ordinals (0.7%) and BRC-20 (1.5%). The rest was taken up by BTC. As a result, Runes transactions are down by over 84% since their all-time high.

Related: Runes and BRC-20s are just a stepping stone for Bitcoin DeFi

Runes are part of a wider developer movement known as Bitcoin decentralized finance (DeFi) , or BTCFi, which aims to add more utility to the Bitcoin network. Adding the newly launched protocol to Ordinals and BRC-20, the Bitcoin network marked a record high of 926,000 daily transactions.

Total number of Bitcoin transactions, all-time chart. Source: Glassnode

However, the real market opportunity regarding the Runes protocol may only emerge months after the first wave of investor hype subsides.

Speaking to Cointelegraph, Nazar Khan, the co-founder and CEO of TeraWulf, said, “Runes and Ordinals are demonstrating the value of block space... The Bitcoin network is the most decentralized, secure, and robust network that exists, so there will be use cases and value derived from that block space.”

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