Outlook on the Bitcoin Ecosystem: Who Will Dominate the New Bull Run Wave?

The market is eagerly awaiting Bitcoin to break through the $70,000 mark. Many investors believe that if Bitcoin can surpass and stabilize at this price point, the long-awaited bull run will officially begin.

Under this optimistic sentiment, important assets in the Bitcoin ecosystem have all risen. The BRC-20 tokens $ORDI and $SATS have increased by 25% and 15% respectively over the past week.

The rune market is bustling with activity. Inspired by a newly released cat figure "Gizmo" from an artist, the rune GIZMO•IMAGINARY•KITTEN has seen its market value soar to nearly $20 million after its minting. Although the artist himself denies any connection to the rune, market enthusiasm remains high.

The popularity of GIZMO•IMAGINARY•KITTEN has also triggered the rise of two other "Golden Dog" runes, namely KODA•FLUFFINGTON, which is modeled after the dog "Koda" of the founder of NodeMonkes, and POOKA•CANNOT•BE•STOPPED, which is said to be modeled after the dog "POOKA" of a certain project founder. Both of these runes quickly surpassed a market value of 1 million USD, reaching peaks of nearly 4 million and 3 million USD respectively.

Several mainstream assets in the Rune market have also experienced significant increases. PUPS•WORLD•PEACE and BILLION•DOLLAR•CAT have seen a maximum increase of nearly 9 times since the end of September, while DOG•GO•TO•THE•MOON has doubled. There are rumors that a certain trading platform is conducting internal security audits and compliance assessments on Rune, which has led to various speculations regarding the recent rise of Rune.

If a bull run is about to start, what is the future development outlook for the Bitcoin ecosystem based on the current situation?

Critical Moment: Continue to be Conservative or Move Towards Openness?

The revival of OP_CAT on the Bitcoin mainnet is of great significance. For the vision of "implementing smart contracts on the Bitcoin mainnet," the current issue is not whether it can be done, but rather the choice of "whether it should be done."

The popularity of the Ordinals protocol last year undoubtedly made an important contribution to the open nature of the Bitcoin ecosystem, but this only opened a small gap. The consensus of the Ordinals protocol is just a small subset of the Bitcoin consensus, which has also led to many shortcomings in user experience for FT protocols on Bitcoin, such as BRC-20 and Runes, making them only "subpar" compared to FT protocols on other public chains.

The lack of functionality or user experience in the protocols actually stems from the limitations of Bitcoin consensus. Since Bitcoin consensus has not opened up further, protocols like Ordinals, BRC-20, and Runes can only strive to achieve the goal of "issuing tokens/images on the Bitcoin mainnet" within the existing constraints. Even so, some Bitcoin core developers still believe that these innovations are a disruption to the mainnet and have been resisting these attempts.

If the BIP-347 proposal "OP_CAT in Tapscript" is passed, and the Bitcoin mainnet ultimately completes the soft fork, it will mean that the consensus of Bitcoin will undergo a tremendous change, shifting from conservative to open, and the development space of Bitcoin will be expanded once again. The reason for saying "expanded once again" is that Runes have taken the narrative of "issuing tokens on the Bitcoin mainnet" to its extreme, making it difficult for latecomers to shake its position, unless a dimensionality-reducing blow such as smart contracts emerges.

However, whether OP_CAT can be revived in this bull run remains highly uncertain. Being assigned a BIP proposal does not mean that the community has reached a consensus on a particular issue, but rather that "the community can start debating this matter." We may not yet be at the stage of considering "whether sufficient support has been obtained," and are still in the phase of "this topic needs more discussion." Some Bitcoin NFT projects are essentially "campaigns" regarding the OP_CAT issue, with certain activists leading the NFT community to advocate for the revival of OP_CAT like politicians. They have repeatedly attempted to publicly debate with developers who hold opposing views, but the latter often adopts a cold treatment attitude, which to some extent also creates suppression.

If OP_CAT can successfully resurrect in this bull run, then the technical narrative of the Bitcoin ecosystem will almost certainly be led by OP_CAT. Currently, there are two main targets attempting to bet on the resurrection of OP_CAT: one is a certain NFT project, and the other is the CAT20 protocol on a certain platform.

If it cannot be revived, then the rune may continue to hold the position of the most influential FT protocol in the Bitcoin ecosystem.

The Rune Market Still Needs to Withstand More Tests

Only after a rune is listed on a centralized exchange does it truly become an FT. Before being listed, the nature of the rune is not much different from that of an NFT, which is reflected in its market value having great "backward force"—when liquidity is good, the market value can soar quickly; conversely, it can experience a crazy drop, with a large amount of small fragmented orders piling up at low prices, leading to even lower-priced sell orders appearing, ultimately falling into a neglected deadlock.

The true market value of Runes needs to undergo liquidity verification from centralized exchanges, which may also be one of the reasons for the slow progress of listing Runes on exchanges.

In addition to centralized exchanges, there are also some rune trading products on the Bitcoin mainnet, and a certain NFT trading platform is about to launch rune trading features. Interestingly, some technically outstanding rune trading products have not gained sufficient traffic; instead, some emerging protocols have brought them attention. Whether certain large platforms can improve the on-chain liquidity of runes based on their own traffic and user experience remains to be seen.

In terms of coin diversity, Rune has already seen the emergence of "fan coins" like PUPS•WORLD•PEACE, but the hot topics are still relatively thin, currently mainly revolving around some large NFT projects or purely generated based on the scale of the holder community. More participants are needed to create a better environment for the formation of content and even fan coins. Some Rune projects are bridging to other public chains to seek greater breakthroughs, which also reflects this.

In comparison, the prospects of BRC-20 currently seem a bit dim, with $ORDI, $SATS, and $PIZZA being almost all of BRC-20.

The NFT blue-chip lineup is relatively stable, and there is still room for exploration in narrative uniqueness.

Currently, there are 5 projects that have solidified their blue-chip status. In addition, there is a relatively special project with a very high inscription number, a low total supply, but a stable floor price above 1 BTC.

In terms of pure art NFTs, as generative art is no longer fresh on other public chains, art on Bitcoin needs to seek breakthroughs in themes, such as conceptual art that combines Bitcoin's own cultural attributes or AI art. From this perspective, CENTS may be the most unique art series on Bitcoin at present, with its uniqueness lying in "the difficulty of replicating this Bitcoin-specific style on other public chains."

The artist behind CENTS selected specific years of copper pennies from a large number of coins, not only engraving them onto Bitcoin but also melting the physical coins into a complete copper block. This practice creates a "tangling of value": it is both 1 cent engraved on Bitcoin and 1 satoshi engraved on the penny; it artificially causes the deflation of the penny and the "deflation" of Bitcoin; an interesting contrast emerges between the legal tender value of the 1 cent coin, its minting cost, and the value of 1 satoshi.

Such narratives are difficult to replicate on other public chains, as the tokens of other public chains are hard to give people a real coin or currency feel.

The DMT concept is also a unique artistic narrative of Bitcoin worth paying attention to. In short, it aims to create specific digital assets based on various data in the Bitcoin blockchain, such as block hash values, block size, block height, block target difficulty, etc. (. Currently, apart from one leading project, the DMT concept has not yet garnered widespread market attention.

Conclusion

Whether OP_CAT can be revived in this bull run will determine the development direction of the Bitcoin ecosystem. Some directions that have not yet become market hotspots, such as the Lightning Network and BitVM, may gain more attention if OP_CAT fails to be revived.

The Bitcoin ecosystem is currently the only area in the crypto market that can still run a "technology narrative". The reason is that Bitcoin is like a computer still equipped with an old processor; it already has sufficient hardware for updates, but the key lies in whether the managers can reach a consensus. However, reaching a consensus is not an easy task, as it not only involves clashes of ideas but may also be entangled with real interests.

In any case, the Bitcoin ecosystem is bound to become one of the important narratives of this bull run, and it will be a unique existence compared to other ecosystems.

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