Bitcoin’s NFT market is growing, but it is primarily driven by newfound hype for memecoin trading on the blockchain.
The monthly trading volume of nonfungible tokens (NFTs) and memecoins on Bitcoin in May surpassed Solana’s volume, according to data from CryptoSlam.
Bitcoin ordinals trading volume currently stands in second place behind Ethereum, which did $393 million in NFT volume, more than twice that of ordinals on Bitcoin (BTC) in 30-days starting April 23. Bitcoin gained a significant lead over popular blockchains like Polygon, ImmutableX, BNB Chain and Solana during this period.
According to a Dune dashboard by BRC-20 token standard creator Domo, BRC-20 token transactions accounted for the majority of ordinals activity on Bitcoin.
The BRC-20 token standard is an experimental fungible token standard built using ordinals. It has harbored hype for memecoin, speculative cryptocurrencies whose price action is fueled by certain enthusiastic communities.
The total market capitalization of BRC-20 memecoins breached the $1 billion mark during the first half of May as the hype around it picked up. The current market capitalization of BRC-20 tokens is $447 million.
The popular BRC-20 tokens like ORDI, PEPE and MEME have no utility attached to them and were primarily issued for experimental purposes. For instance, Twitter user Domo created ORDI to showcase the BRC-20 functionality that Ordinals provided.
The primary driver of BRC-20 volumes appears to be coming from traders who are looking to benefit from the newfound craze. However, as gains subside, the trading activity around BRC-20 tokens will likely fall as well.
Bitcoin NFT trading picks up
Besides BRC-20 tokens, the market is witnessing a shift from BRC-20 tokens to media-based ordinals, aka Bitcoin NFTs. Magic Eden, a popular Bitcoin NFT marketplace, has started to eat into UniSat’s volume, which primarily trades in BRC-20 tokens.
Popular collections like Bitcoin Frogs did around one-fourth the volume of top collections on Ethereum like Bored Ape Yacht Club (BAYC), which did just over $40 million in trading volume between April 23 and May 23.
NFT traders will hope to replicate the success of Ethereum NFTs on Bitcoin with collections forming exclusive groups of ordinals holders.
So far, the Bitcoin NFT ecosystem appears miles behind Ethereum, which can support decentralized autonomous organizations and has other advantages like integration with the $27.5 billion strong decentralized finance ecosystem.
For instance, BAYC and Azuki have metaverse projects built around them, which provide exclusive advantages to NFT holders. On the other hand, CryptoPunks and Milady Maker enjoy popularity due to their scarcity and early mover advantage.
It remains to be seen how successful Bitcoin NFT collections are in forming loyal communities like that of CryptoPunks, Milady Maker, Azuki or BAYC. While the trading volume of NFTs and memecoins on Bitcoin attained the second spot in May, the NFT collections have yet to provide utility or build a loyal community of holders.
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