On April 20, when Bitcoin completed its fourth halving at block height 840,000, it introduced the long-awaited Runes protocol. The protocol was proposed by Casey Rodarmor, the founder of the Bitcoin Ordinals protocol, and utilizes the UTXO transaction model of the blockchain to promote the issuance of alternative cryptocurrencies in an efficient and easy-to-use manner. In addition, the OKX Web3 wallet was launched on the Runes self-developed market in a timely manner, providing users with a one-stop rune ecological experience, thus promoting the activity of the entire ecosystem and user convenience.
Different from the previous market, the current "Rune" hot project mainly appears in the form of Bitcoin NFT, which is characterized by the fairness of no pre-mining or pre-allocation . Although these small pictures of rune concepts are simple, they have attracted a lot of attention. Especially with the upcoming release of Runestone and the date of the Runes Protocol mainnet launch approaching, the market heat continues to heat up. The technical details and market dynamics behind this will be crucial for investors, especially when assessing the risks associated with the official interpretation authority of the Ordinals protocol. Next, the article will further explore the impact and investment opportunities of the Runes protocol.
U.S. retail sales data for March were strong, exceeding Market expectations, but Federal Reserve Chairman Powell's hawkish speech dampened market expectations for future interest rate cuts. Currently, the market expects that the Federal Reserve may only cut interest rates once or twice this year, by 25 basis points each time, which is significantly reduced from the six rate cuts expected at the beginning of the year. In addition, tensions in the Middle East have eased, but this did not prevent the U.S. dollar index from hitting a new half-year high. At the same time, U.S. stocks fell sharply due to adjustments in liquidity expectations.
In the cryptocurrency market, although Bitcoin’s overall performance is weak, its market dominance has unexpectedly increased, reaching a new high in four years. This increase in dominance is mainly due to the market’s high attention to the Runes protocol, which is scheduled to be officially launched during this weekend’s BTC halving event, attracting the attention of a large amount of US funds.
Specifically at the exchange level, Binance and OK Exchange have launched new tokens such as TAO and MERLIN respectively. The TAO token relies on AI and machines Learn the POW architecture, and MERLIN, as BTC’s EVM Layer 2 solution, has strong technical support and market potential. The OMNI token focuses on cross-chain information transmission between Ethereum Layer 2 to solve the L2 fragmentation problem. Its market value is equivalent to that of ZETA, both exceeding US$2.5 billion.
From the perspective of technical and market indicators, Bitcoin’s price cycle pattern shows that the first two bull markets lasted 3.5 years each and the price increased 113 times. and 19 times. Prices have only increased 4x so far in the current cycle, indicating a slowdown in acceleration. In addition, the activity of the spot ETF market has also brought new capital inflows. It is estimated that the new capital is about 12 billion U.S. dollars. The valuation of BTC held by ETFs has reached 60 billion U.S. dollars, becoming a key driver of the market.
The market value of stablecoins increased by 2%, reflecting that the fundamentals of long-term funding remain healthy. The MVRV-ZScore indicator is currently 2.1, which is in the neutral range. The overall profitability of the market is good, but it has not yet reached the extreme market top or bottom range.
In the futures market, the funding rate is close to 0 this week, indicating that bulls have the upper hand and the short-term market may be close to a top. BTC futures positions have dropped significantly, indicating a partial withdrawal of main funds. The long-short ratio of futures is 2.4, indicating that market sentiment is biased toward greed.
In the spot market, the continued decline in BTC prices and the implementation of the halving event have caused the minimum shutdown price for miners to rise to $49,000. Bitcoin is down 15% since the top, while major altcoins are down nearly 50%, reflecting continued buying pressure due to ETFs and selling pressure as altcoins unlock. A comprehensive improvement in market liquidity is expected to officially arrive at the end of the year with the Federal Reserve's interest rate cut, and the entire crypto market may then usher in a general rally.
The above macroeconomic improvements, optimization of technical indicators and adjustments to the futures and spot markets have provided a good market environment for the launch of the Runes protocol, indicating that it may trigger a new round of technological revolution in the encryption market. and financial flows. For investors, paying attention to the latest changes in these economic indicators and market dynamics is the key to grasping future investment opportunities and risks.
Runes Protocol was designed by Casey Rodarmor, founder of Ordinals Protocol, and introduces a new type of asset management and issuance strategy to the Bitcoin network Assets - Runes. This protocol aims to solve the inefficiency and operational complexity issues caused by the inscriptions that the BRC-20 protocol relies on, providing a more concise and efficient asset issuance and management framework.
The Runes protocol has excellent compatibility and scalability, and can work seamlessly with Bitcoin’s UTXO model and second-layer protocols based on it (such as Lightning Network and CKB) docking. Compared with other homogeneous token protocols such as BRC-20, Runes greatly improves operational efficiency and user experience through simplified transaction processes and token balance management directly bound to UTXO.
Runes supports Simple Payment Verification (SPV) wallet, providing users with a lightweight transaction experience that is better than the traditional BRC-20 protocol. It also emphasizes compatibility with existing Bitcoin scripts and address types, providing developers with a more friendly and easy-to-access development environment.
Runes offers tremendous flexibility when it comes to token issuance. It allows token name lengths ranging from 1 to 28 characters, and adopts a variety of innovative issuance mechanisms, such as fixed total issuance and public inscription issuance, as well as more expressive issuance methods. These mechanisms not only enrich the token design space of the Bitcoin ecosystem, but also improve its security, effectively avoiding common security risks.
Runes optimizes UTXO management by using the OP_RETURN script, avoiding the complexity and security risks that may be caused by the witness part of the transaction, and reducing unnecessary UTXO generation. This approach not only improves the overall health and efficiency of the network, but also integrates seamlessly with Bitcoin’s infrastructure, encouraging more optimal UTXO usage.
As Bitcoin is about to usher in the next round of halving, at the important moment of block height 840,000, the Runes protocol is expected to be officially launched. The expected launch time is late April 2024, which marks that the Runes protocol will officially join the Bitcoin ecosystem, opening a new chapter for the issuance and management of homogeneous tokens on the Bitcoin network. In addition, protocols such as Merlin stated that they will provide comprehensive technical support for Runestone and Runes. This comprehensive community support not only reflects the Bitcoin community’s recognition of the potential of the Runes protocol, but also demonstrates the cryptocurrency community’s common pursuit of innovation and progress.
The launch of the Runes protocol marks an important technological innovation in the Bitcoin ecosystem. By simplifying the UTXO model and efficient token transfer mechanism, it opens up new possibilities for the diversified development and technological innovation of the Bitcoin network. .
Since the Bitcoin halving and the successful launch of the Runes protocol, the activity of the crypto community has increased significantly, and the atmosphere of celebrating the new protocol is indistinguishable from the holidays. different. At present, more than 4,700 rune projects have been launched, and miner fees have also dropped significantly compared with the initial stage of launch, providing investors and participants with more friendly entry conditions.
After exploring these rune projects in detail, we found that they are mainly divided into the following categories, each with investment value:
1. No. 1 rune Items: Such as UNCOMMON•GOODS and other runes numbered 0-9. Due to their uniqueness and open participation methods, it is recommended to participate when the gas fee is low to obtain the best narrative value.
2. Highly popular projects: such as DECENTRALIZED and DOG•GO•TO•THE•MOON. These projects are usually airdropped to early supporters first, and then the price increases as the market heats up.
3. Technology and community-driven projects: THE•RUNIX•TOKEN and SATOSHI•NAKAMOTO demonstrate the model of promoting project development through technological innovation or community activities. Among them, SATOSHI•NAKAMOTO is known for its significant market performance and broad scope. The currency holding address has attracted much attention.
In addition, it is interesting that MEME runes such as COOK•THE•MEMPOOL and WANKO•MANKO•RUNES have also attracted a lot of attention. They usually have unique cultural value and limited-time mint mechanism, with large price fluctuations and high investment returns. .
Community runes, such as PUPS•WORLD•PEACE and MAGIC•INTERNET•MONEY, rely on strong community support and rich social media activities to continue to attract new participants.
When investing in these rune projects, considering the novelty of the rune protocol and the uncertainty of the market, it is recommended that investors should have a deep understanding of the issuance mechanism, community vitality and technical support of each project. Although the design of Runes provides higher efficiency and a better user experience, there may still be some technical and cognitive barriers in the early stage of the market.
In short, the launch of the Runes protocol not only brings new vitality to the Bitcoin network, but also opens up a new path for the diversification and technological innovation of crypto assets. As these rune projects gradually unfold, the market will pay more attention to technical practicality and community participation, and is expected to lead a new wave of cryptocurrency innovation. Against this backdrop, are you ready to explore and invest in these potential rune projects?
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