“Ordinal Inscriptions”, similar to NFTs, are digital assets inscribed on a satoshi, the lowest denomination of a Bitcoin (BTC). According to data from Dune Analytics, Bitcoin Ordinals hit 58,179 Inscriptions on April 2, breaking the previous all-time high of 31,692 on March 9, representing an 83.5% increase.
This spike is believed to be driven by the recent creation of the new token standard called BRC-20 (Bitcoin Request for Comment – 20) on the Ordinals protocol by an on-chain analyst named Domo in early March.
While Ordinals are NFT-like “digital artifacts” which carry data in the form of text, JPEG images, PDFs, video and audio formats on the Bitcoin network, the new token standard BRC-20 utilizes Ordinals Inscription to deploy token contracts, mint tokens, and transfer tokens – similar to Ethereum’s ERC-20 token standard.
The appearance of Ordinals and BRC-20 tokens on Bitcoin were enabled by the Taproot soft fork, which took effect on November 14, 2021. Over 62,000 Inscriptions on April 2 were minted in the form of text-based Ordinals, a large number of which were represented by BRC-20 tokens.
Leonidis, a Bitcoin Ordinals collector, explained on Twitter that the spike on April 2 could be due to the new tools used to interact with BRC-20 tokens rolled out in the last few days:
These new tools mentioned above include Ord.io, UniSat Wallet, and BRC-20.io. According to BRC-20.io, 1,600 tokens have been created since the BRC-20 token standard was launched. The most popular BRC-20 tokens are “pepe,” “ordi,” and “punk,” which currently have market capitalizations of $2.5 million, $2.1 million, and $900,000, respectively. Over 42,700 BRC–20 tokens have been minted in the last 24 hours, mostly coming from “wzrd”, “domo”, “BAYC”, “meme” and “pups” tokens.
While the market cap of the BRC-20 token is currently under $10 million, digital asset investment firm Galaxy Digital believes the “Bitcoin NFT” market could reach $4.5 billion by 2025.
The Bitcoin community is still split on whether Ordinals fit into the Bitcoin ecosystem. Advocates like Dan Held suggest that it offers more financial use cases on Bitcoin, while others say it is moving away from Satoshi Nakamoto’s vision of Bitcoin as a peer-to-peer cash system.