BRC-20 Tokens Bleed as Traders Shift Focus to Runes amidst Bitcoin Halving

The two largest BRC-20 tokens, ORD and SATS, have experienced significant declines of over 40% in the week leading up to the Bitcoin halving. This decline in value has coincided with a decrease in BRC-20 token sales, with PUPS and WZRD seeing drops of 30% and 63% respectively. In contrast, the daily sales volume of RUNE tokens has skyrocketed by over 4,500%, suggesting that traders are shifting their focus to Bitcoin Runes.

Both PUPS and WZRD tokens were among the top three in terms of sales volume across all blockchains in the past week. PUPS amassed over $41 billion in sales volume, while WZRD accumulated $16.3 million in weekly sales. The increase in interest in Bitcoin Runes can be attributed to its upcoming launch, which will coincide with the Bitcoin halving.

Despite the surge in interest, some believe that the real market opportunity for Runes may only arise after the initial wave of hype subsides. There are concerns that Rune prices could decline significantly after the halving, as they do not immediately improve the trading experience of BRC-20 tokens. Small traders may be priced out due to increasing Bitcoin transaction fees.

It is expected that hundreds of Runes could potentially launch on the market, leading to dilution of trader attention and capital inflows. Without initial utility, Runes may trade like memecoins, losing their initial excitement. There is optimism that Runes could become more functional over time, particularly with the integration of the Internet Computer Protocol (ICP). This integration would allow smart contracts to interact with Runes and BRC-20 tokens directly on Bitcoin’s base layer, unlocking more possibilities for holders.

These efforts are part of a new paradigm known as Bitcoin decentralized finance (DeFi) or BTCFi, which aims to create more utility around BTC and Bitcoin-native assets. Despite the potential challenges and uncertainties surrounding Runes, many remain bullish on their long-term prospects.