Future Prospects of the Bitcoin Ecosystem

The market is full of expectations for Bitcoin to break through the $70,000 mark. Many investors believe that if Bitcoin can stabilize around this price level, the long-awaited bull market will officially begin.

In this optimistic sentiment, important assets in the Bitcoin ecosystem have all seen an increase. BRC-20 tokens such as $ORDI and $SATS rose by as much as 25% and 15% respectively in the past week.

The rune market is particularly bustling. After the rune GIZMO•IMAGINARY•KITTEN themed around the "Gizmo" cat was minted, its market value soared to nearly $20 million. Although the creator denies any connection to this rune, the market enthusiasm remains undiminished.

As a result, the other two "Golden Dog" runes also rose rapidly. KODA•FLUFFINGTON, inspired by the dog "Koda" of the NodeMonkes founder, and POOKA•CANNOT•BE•STOPPED, inspired by the dog "POOKA" of the suspected OMB founder zkshark, both quickly surpassed a market value of 1 million USD. KODA•FLUFFINGTON reached a peak market value of nearly 4 million USD, while POOKA•CANNOT•BE•STOPPED approached 3 million USD.

The leading assets in the Rune market have also seen significant increases. PUPS•WORLD•PEACE and BILLION•DOLLAR•CAT have surged nearly 9 times since the end of September, while DOG•GO•TO•THE•MOON has increased by up to 1 time. Recently, there have been reports that a certain trading platform is conducting internal security audits and compliance assessments on Runes, which has led to more associations regarding the recent rise of Runes.

If a bull market is about to start, what will the prospects of the Bitcoin ecosystem be?

The Eve of Transformation: Conservative or Open?

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 the technical feasibility, but the choice of whether it should be implemented.

Last year's popularity of the Ordinals protocol made an important contribution to the openness of the Bitcoin ecosystem, but it merely opened a crack. The consensus of the Ordinals protocol is just a small subset of the Bitcoin consensus, which has resulted in token protocols on Bitcoin, such as BRC-20 and Runes, having shortcomings in user experience compared to other blockchains.

The limitations of Bitcoin consensus have led to these new protocols being able to achieve the goal of "issuing tokens/images on the Bitcoin mainnet" only under limited conditions. Nevertheless, some Bitcoin core developers still believe that these innovations are a disruption to the mainnet and have been resisting them.

If the BIP-347 proposal "OP_CAT in Tapscript" is passed, and the Bitcoin mainnet ultimately completes the soft fork, it will mean a significant shift in Bitcoin consensus from conservative to open, expanding the development space for Bitcoin once again.

However, whether OP_CAT can be revived in this bull market remains highly uncertain. Currently, we may still be in the "this topic needs more discussion" stage. The Bitcoin NFT project Quantum Cats is essentially a "campaign" addressing the OP_CAT issue.

If OP_CAT can successfully revive in this bull market, then the technical narrative of the Bitcoin ecosystem will likely be dominated by OP_CAT. Currently, the CAT20 protocols on Quantum Cats and Fractal are the two main targets attempting to bet on the revival of OP_CAT.

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

The Rune Market Faces More Challenges

Rune only truly becomes a token after being listed on a centralized exchange. Before that, the nature of Rune is not much different from that of an NFT, which is reflected in its market value showing significant volatility. When liquidity is good, the market value will rise rapidly; conversely, there will be a situation where a large number of low-priced sell orders accumulate.

The real market value of the rune needs to be verified for liquidity through centralized exchanges, which may also be one of the reasons for the slow process of listing rune tokens on exchanges.

In addition to centralized exchanges, rune trading products like Dotswap have also appeared on the Bitcoin mainnet, and a certain trading platform is about to launch rune trading features. Interestingly, although Dotswap has a good product, it has not gained enough traffic; instead, CAT20 on Fractal has brought a lot of attention to Dotswap.

In terms of token types, there have already emerged "internet celebrity coins" like PUPS•WORLD•PEACE, but the hot topics are still relatively singular, mainly revolving around a few major NFT projects within the circle or purely generated based on the size of the holder community. This is also reflected in PUPS•WORLD•PEACE and BILLION•DOLLAR•CAT bridging to other public chains in search of greater development.

In contrast, the prospects of BRC-20 currently seem relatively bleak, with $ORDI, $SATS, and $PIZZA being almost the entirety of BRC-20.

The NFT blue-chip tier tends to stabilize, while the uniqueness of the narrative still needs exploration.

NodeMonkes, Bitcoin Puppets, OMB, Quantum Cats, and Pizza Ninjas have solidified their blue-chip status. In addition, Bitcoin Shrooms is a special case, with a low inscription number and total supply, but a floor price stable above 1 BTC.

In the field of pure art NFTs, since generative art is no longer novel on other public chains, art on Bitcoin needs to seek breakthroughs in themes, such as conceptual art that integrates the cultural attributes of Bitcoin itself, or AI art, etc. From this perspective, CENTS may be the most unique art series currently on Bitcoin.

The artist behind CENTS, Rutherford Chang, filters out pure copper pennies from a large number of penny coins that are from 1982 and earlier, not only engraving them onto Bitcoin but also melting the physical pennies into a solid block of copper. This combination of physical and digital art forms a unique "value entanglement" on Bitcoin, a narrative that is difficult to replicate on other public chains.

The DMT concept is also a unique artistic narrative of Bitcoin worth noting. It aims to create specific digital assets based on various data within the Bitcoin blockchain. Currently, apart from the leading project Natcats, there are no other DMT concept projects that have attracted sufficient market attention.

Conclusion

The revival of OP_CAT in this bull market will determine the development direction of the Bitcoin ecosystem. Some currently not yet hot market directions, such as the Lightning Network (Taro, RGB, CKB), BitVM, etc., may gain more attention in the absence of OP_CAT's revival.

The Bitcoin ecosystem is currently the only area in the crypto market that can still drive the "technological narrative." This is because Bitcoin is like an old computer still using an outdated processor, and it already has enough hardware to be updated; the key is whether decision-makers can reach a consensus. However, reaching a consensus is a difficult process that involves clashes of ideas and conflicts of real interests.

In any case, the Bitcoin ecosystem will undoubtedly become one of the important narratives of this bull market, and it will be a presence that is quite special compared to other ecosystems.