Can the Bitcoin Rune Fever Last?

Runes, a new protocol for minting fungible tokens on Bitcoin, has certainly lived up to the hype, at least initially. Are runes a passing fad, or can they usher in a new future for Bitcoin and its transaction volumes?

The launch of Rune brought a historic shift as the halving approached. 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 transaction fees alone, far exceeding the block reward of $26.28 million.

Rune tokens are attached to Bitcoin’s UTXOs (unspent transaction outputs) rather than individual satoshis, which makes it possible for them to be integrated with the Lightning Network or other Bitcoin L2s in the future.

The rapid increase in costs has been largely driven by the runes' rapid popularity.

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

Despite the initial frenzy, Rune trading volumes 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.

Going 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 right now may be to wait and see how Runes perform, especially in the coming weeks.