BRC-20 Tokens on the Brink of $1 Billion Market Cap

With 14,200 BRC-20 tokens minted on Bitcoin, the BRC-20 market cap almost reached $1 billion before retreating to its current level of around $700 million. ORDI is leading the charge, boasting a diluted market cap of $390 million.

BRC-20 Tokens on the Brink of $1 Billion Market Cap

According to data from brc-20.io, the market cap of BRC-20 tokens on the Bitcoin network nearly hit $1 billion before pulling back to approximately $700 million.

Source: @_May_Ham, May 8, 2023

Among the BRC-20 tokens, most are memecoins. Leading the trend is ORDI, which has a fully diluted valuation exceeding half a billion dollars. ORDI was recently listed on Gate.io and Crypto.com on May 7th, as these exchanges aim to capitalize on the BRC-20 wave.

As of the time of writing, ORDI’s price has significantly decreased from its peak of $29.58 established at the time of listing. However, its current price still reflects a strong performance compared to just a week ago when ORDI was trading at $3.78.

ORDI is trading around $19.58 as of 09:30 AM on May 9, 2023. Source: brc-20.io

Within the BRC-20 ecosystem, ORDI is followed by tokens such as PEPE (different from the popular memecoin on Ethereum), MEME, DOMO, and NALS, with market caps ranging from $12 million to $42 million.

While the Ordinals team created the method for minting NFTs on Bitcoin, developer @domodata introduced BRC-20, a new token standard built on Ordinals, on March 8th.

Ordinals allow developers to embed data into each satoshi on the network through a process called inscription. BRC-20 tokens do not use smart contracts; instead, they require a Bitcoin wallet to mint and transact tokens. Essentially, BRC-20 facilitates the issuance, minting, and transfer of tokens between users.

The current BRC-20 frenzy, driven by community curiosity, has led to record-high Bitcoin transaction fees, causing network congestion and multiple withdrawal halts on Binance. According to Dune Analytics, 65% of Bitcoin transactions are BRC-20-related.

Data from The Block indicates that with 14,200 BRC-20 tokens minted, daily Bitcoin transactions have doubled since the end of December 2022, reaching 534,000 transactions. Recent blocks have been filled with BRC-20 transactions, with gas fees sometimes reaching $20, an 800% increase from the previous $1-2 fees.

On the flip side, a miner earned 6,701 BTC (approximately $200,000) in gas fees on the night of May 7th, surpassing the block reward of 6.35 BTC. This is a rare example of the BRC-20 boom.

Conversely, Anita Posch, a Bitcoin educator and founder of Bitcoin for Fairness, expressed concern on Twitter:

“Can someone explain how to manage these fees? I primarily educate people in Africa about Bitcoin, but they can’t afford such high fees. People here really need BTC, not just to play around like the rest of the world.”

High gas fees are a double-edged sword for the Bitcoin network, especially for everyday users. This is also an opportune moment for the Lightning Network to play its role. Lightning is known as a Layer-2 scaling solution for Bitcoin. Binance has also considered integrating this solution to mitigate rising transaction fees.