Bitcoin's Meme Coin Renaissance: How Asia's Institutional Investors Might Drive Runes' Growth

[TL; DR]

Many institutions based in Asia are willing to invest in the Runes protocol.

Newman Group, Magic Eden and OKX are examples of organizations which have already invested in the Runes protocol.

The Dog Go to the Moon token is one of the leading meme coins on the Runes protocol.

Introduction

The launch of Bitcoin Runes on 20 April, the day the BTC halving occurred, gave much hope to the crypto sector. Many people believe that the Runes and Ordinals inions have brought vibrancy to the blockchain since the two protocols may help to sustain the network through transaction fees. That assumption seemed to have been validated by the rise in Runes transaction fees during the following few weeks. However, the tide turned as the level of Runes generated transaction fees declined in recent weeks. In this article, we discuss how Asia’s institutional investors may drive the Runes’ growth.

Bitcoin Runes’ Rocky Start

The story of the bitcoin Runes protocol, a smart contract for creating meme coins, has sent mixed signals among the crypto community. After the launch of the protocol on 20 April there was a flurry of activity which led to an astronomical surge in bitcoin transaction fees. A few days after its launch more than one hundred tickers were added on the bitcoin network using the Runes protocol. Notably, within three days after the launch of the Runes there were more than 1 million transactions.

Sadly, during the following week the transaction volume on the protocol fell by over 90% leading some analysts to question the sustainability of the Runes protocol. However in late May there was renewed activity on the protocol. Just like before, the frenzy on the Runes protocol cooled off again. Since then, the level of activity on the protocol has remained very low. The following graph shows the growth in Runes volume since the launch of the protocol.

Runes Transaction Volumes - GenniData

As The Graph indicates, the trading volume was high during April and the first week of May. Thereafter, it dropped sharply. However, the bitcoin Runes resurgence may lead to a surge in meme coins. In addition, the expansion of the bitcoin gaming eco may trigger a rise in the demand for the protocol and the resultant trading volumes.

Institutional Optimism Fuels Runes Protocol

Although the Optimism surrounding the Runes protocol seemed to have cooled off within the Western digital asset market, Asian institutional investors are breathing life into the project as they are ready to pour more financial resources than before. One reason for their interest in the protocol is its strong attributes such as its optimized transaction models, security features and robust scalability.

Some Asian institutional investors like the Newman Group, Magic Eden and OKX are willing to embrace the Runes protocol to drive their different functionalities and meet their unique needs. For example, the Newman Group, via its portfolio companies, Liquidium and Xverse, is working on launching its products on the Runes protocol.

Read also: Understanding Bitcoin’s Layer 1 Runes Protocol

On the other hand, Magic Eden, a cross-chain NFT marketplace has integrated its platform with the Runes protocol. Similarly, OKX, a leading centralized exchange in Asia, has also integrated with it which has enabled it to offer zero-fee trades. Another reason for institutional excitement Runes is the protocol’s ability to interact seamlessly with other crypto projects. Incidentally, that is one reason OKX has chosen to integrate the bitcoin meme coin protocol.

As per a statement quoted by Aliteq, Adrian Lai, founder of Newman Group, said, “We believe that Runes could ultimately be greater than BRC-20, especially when considering the benefits to institutional investors. Runes’ technical advantages and efficient cross-chain transaction potential could make it the preferred choice for institutions wanting to access DeFi on Bitcoin.”

Paige Xu, an investor at OKX, also believes in Runes protocol’s long term potential. He said, “Runes has the right things, including efficiency and a thin blockchain footprint (energy efficient, contributes to greenhouse gas reduction), technology that organizations are often looking for, helping to meet large demand quickly”.

However, Xu thinks that the Rune protocol growth may require much more time. To this effect, he added, “The adoption of Bitcoin-based technology like this is still quite new and depends heavily on the level of education and integration of these assets into the wider financial world.”

Runes Protocol Hits $2 Billion Cap

As alluded to earlier on, there was much activity on the Runes protocol a few days after its launch in April. By the end of May the Runes market cap had reached $1 billion. However, due to the sustained interest in bitcoin-based memecoins its total valuation has surpassed $2 billion. As the Runes protocol adoption continues to rise due to institutional support the Runes market capitalization may continue to grow.

Basically, the Runes protocol development team is focused on enhancing bitcoin technical advantages such as efficiency and cost-effectiveness. For example, the Runes protocol scalability is one of the major attractions of the entire . Casey Rodarmor, who is also the founder of the Ordinals protocol, believes that the Runes protocol is a secure, scalable and efficient bitcoin fungible token standard smart contract.

Analysis of Runes’ features

As said, many investors prefer the Runes protocol to the Ordinals protocol due to several reasons that include the ease of use. Also, several analysts have commented on the bitcoin Runes technical advantages like scalability and efficiency. For example, Ciara Sun, founder and managing partner of C Squared Ventures, an Asia-focused crypto investment firm, told Decrypt: “Runes is structured to potentially meet the stringent requirements of institutional investors, emphasizing scalability, efficiency, and security.”

Cited by the same source Xu said, “Runes has the right stuff—efficiency and a slim blockchain footprint—that institutions typically look for in tech, that can handle heavy demand securely.”

Read also: Runes protocol and the “open etching” issuance mechanism

Price jump of DOG and other Runes tokens

The Dog Go to the Moon token (DOG), launched on 20 April on the Runes protocol is now ranked number three on the bitcoin network and seventh in the entire memecoin market. With a market cap of $759,987,083 and trading at $0.00774 DOG has gained by 86% within the last 2 weeks and 189% within the last 30 days. The following image shows some of the leading tokens on the Runes protocol that are also performing well.

memecoins on Runes Protocol - Cointelegraph

As you note, RSIC with a market cap of over $300 million is another leading memecoin on the Runes protocol.

Runes’ Potential: Beyond the Hype

The prospect of the Runes protocol is great considering that many investors have much interest in it. However, to increase its adoption there is need to educate members of the crypto community including developers and project leaders about it. The Runes protocol’s capability to integrate assets into the broader financial world is key to its future growth and adoption.

Conclusion

There is hope that the market may witness a bitcoin meme coin resurgence following much Asia institutional investment in the Runes protocol. For example, Newman Group, Magic Eden and OKX have already invested in the project. Such institutional investors are willing to invest in the protocol due to its excellent features such as high scalability, cost-effectiveness and efficiency.