{"id":14495,"date":"2024-06-03T03:45:21","date_gmt":"2024-06-03T07:45:21","guid":{"rendered":"https:\/\/sikaoer.com\/bitcoin-runes-resurgence-why-asias-institutional-investors-could-fuel-growth\/"},"modified":"2024-06-03T03:45:21","modified_gmt":"2024-06-03T07:45:21","slug":"bitcoin-runes-resurgence-why-asias-institutional-investors-could-fuel-growth","status":"publish","type":"post","link":"https:\/\/sikaoer.com\/bitcoin-runes-resurgence-why-asias-institutional-investors-could-fuel-growth\/","title":{"rendered":"Bitcoin Runes Resurgence? Why Asia\u2019s Institutional Investors Could Fuel Growth"},"content":{"rendered":"
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Go to Alpha Reports<\/span><\/div>\n In crypto, where most histories are reduced to one-liners, the tale of the Runes protocol\u2014an optimized framework for <\/span>creating meme coins<\/span> on <\/span>Bitcoin<\/span>\u2014goes something like this: It started with a bang and faded out, just as fast, with a whimper.\u00a0<\/span><\/p>\n Barely a month has passed since Runes\u2019 blockbuster <\/span>debut<\/span> alongside the Bitcoin halving in April; and yet, the protocol\u2019s subsequent failure to meet lofty benchmarks has led many to write the whole endeavor off as a <\/span>misfire<\/span>.\u00a0<\/span><\/p>\n But could growing institutional excitement for Runes in East Asia signal a possible second act for the budding protocol?<\/span><\/p>\n While mainstream chatter around Runes has quieted in the West, buzz in Asia surrounding the protocol has only continued to snowball\u2014particularly among institutional investors and more centralized building teams who see it as a more sophisticated riff on the theme compared to the earlier <\/span>BRC-20 fungible token standard<\/span>.<\/span><\/p>\n BRC-20 tokens, the first wave of Bitcoin meme coins, created heaps of organic excitement when they took crypto by storm in <\/span>2023<\/span>, birthed from a makeshift tweak to <\/span>Bitcoin Ordinals<\/span> code. Their debut was chaotic, highly <\/span>experimental<\/span>, and decentralized\u2014the perfect storm for success in the cryptosphere.\u00a0<\/span><\/p>\n The Runes protocol, by contrast, was rolled out far more <\/span>methodically<\/span>, by a team of reputable engineers who focused on security, scalability, and easily navigable building tools. In fact, it came from the original creator of the Ordinals protocol, Casey Rodarmor, who believed he could make a better fungible token protocol than the one that riffed on his own earlier code.<\/span><\/p>\n That emphasis arguably hasn\u2019t yet made much of an impression on degen traders. But investors in East Asia say it\u2019s already made a world of difference to them.\u00a0<\/span><\/p>\n \u201cRunes is structured to potentially meet the stringent requirements of institutional investors, emphasizing scalability, efficiency, and security,\u201d Ciara Sun, founder and managing partner of Asia-focused crypto investment firm C Squared Ventures, told <\/span>Decrypt<\/span>. \u201cThis alignment might make Runes more appealing to a broader institutional base.\u201d<\/span><\/p>\n Some Asian investment firms, like the Hong Kong-based Newman Group, have already jumped headfirst into Runes. The company says it's actively pushing Runes development via portfolio\u00a0 companies like <\/span>Xverse<\/span> and <\/span>Liquidium<\/span>, given what the firm sees as Runes\u2019 potential to become a fundamental infrastructure layer for the entire crypto industry.\u00a0<\/span><\/p>\n \u201cWe believe Runes could end up being bigger than BRC-20, especially considering institutional interest,\u201d Adrian Lai, Newman Group\u2019s founder, told <\/span>Decrypt<\/span>. \u201cRunes' technical advantages and potential for efficient cross-chain transactions could make it a preferred choice for institutions looking to access DeFi on Bitcoin.\u201d<\/span><\/p>\n Some of crypto\u2019s most prominent companies have already <\/span>lined up<\/span> behind the protocol. Leading cross-chain NFT marketplace Magic Eden <\/span>launched<\/span> a dedicated Runes platform in April. OKX, one of Asia\u2019s top centralized crypto exchanges, has <\/span>eagerly embraced<\/span> the protocol; it was the first such exchange to offer <\/span>zero-fee<\/span> Runes trading.<\/span><\/p>\n Paige Xu, an investor at OKX, says Runes were almost perfectly designed to check every box on an institutional investor\u2019s wishlist. She particularly noted the protocol\u2019s unspent transaction output (UTXO) model, which allows tokens to interact far more seamlessly with crypto wallets, layer-2 networks, and DeFi apps than BRC-20 tokens or Ordinals inscriptions currently can.\u00a0<\/span><\/p>\n \u201cRunes has the right stuff\u2014efficiency and a slim blockchain footprint\u2014that institutions typically look for in tech, that can handle heavy demand securely,\u201d Xu told <\/span>Decrypt<\/span>, adding that her personal views do not necessarily reflect that of her employer.\u00a0<\/span><\/p>\n The investor noted, however, that Runes\u2019 ascendancy to dominance via institutional support is far from a done deal.\u00a0<\/span><\/p>\n \u201cAdoption of Bitcoin-based tech like this is still pretty new, and a lot depends on how well we can educate and integrate these assets into the broader financial world,\u201d she said.\u00a0<\/span><\/p>\n In the days following its April 19 launch, interest in Runes soared; three days in, the protocol saw over a million transactions, according to on-chain data from <\/span>Dune<\/span>. Transaction volume then plummeted by as much as 90% in the following weeks, amid a broader cooling-off period across the crypto ecosystem.<\/span><\/p>\n In late May, however, activity on Runes more than tripled. For the first time ever, the total market capitalization of assets on the protocol hit $1 billion, according to <\/span>GeniiData<\/span>. That figure has since <\/span>eclipsed $2 billion<\/span>, indicating that Runes may be enjoying something of a comeback (despite being barely a month old).\u00a0<\/span><\/p>\n There is no guarantee that institutional excitement about Runes will lead the protocol to dominate the crypto industry, as many once assumed. But if current sentiment in East Asia is any indication, then crypto\u2019s largest players are coming to the conclusion that there is only one road to mainstreaming fungible Bitcoin tokens\u2014and that road runs through Runes.\u00a0<\/span><\/p>\n \u201cIf issuing fungible tokens on the Bitcoin blockchain is the right move, then deciding between Runes and BRC-20 comes down to which has a better chance of long-term viability and diversity,\u201d <\/span>MiXWeb3<\/span>, the pseudonymous founder of the <\/span>Runes China<\/span> community, told <\/span>Decrypt<\/span>. \u201cThat makes the choice much clearer.\u201d<\/span><\/p>\n Edited by Andrew Hayward<\/p>\n Start every day with the top news stories right now, plus original features, a podcast, videos and more.<\/p>\n<\/div>\n<\/div>\n<\/div>\nDaily Debrief Newsletter<\/h3>\n