Galaxy Research: Can Bitcoin Ordinals continue to grow?

! [Galaxy Research: Can Bitcoin Ordinals Continue to Grow?] ](https://cdn-img.panewslab.com//panews/2022/10/12/images/a9b169ec431a9113fcbc69b5b9726a2b.png)

Author | Callum@Web3CN.Pro

Bitcoin has become an important player in the NFT ecosystem. According to a new report from Galaxy Research, 1.14 million image-based inscriptions have been created on the Bitcoin network in the first 200 days since the first inscription. This number exceeds the total number of NFTs minted by other major blockchain networks such as Ethereum, Solana, and Polygon in the first 200 days. Bitcoin has become the third most popular NFT interactive platform.

Bitcoin Ordinals debuts

In January 2023, software engineer Casey Rodarmor launched the Ordinals protocol, a tool for embedding data directly into the Bitcoin blockchain. The protocol helps integrate data into satoshis (satoshis) – the smallest Bitcoin unit worth 0.00000001 BTC. This embedding behavior is known as "inscription," and data can range from images and video to audio and text. Essentially, these engraved Satoshis produce digital artifacts native to the Bitcoin ecosystem, also known as Bitcoin NFTs.

! [Galaxy Research: Can Bitcoin Ordinals Continue to Grow?] ](https://cdn-img.panewslab.com//panews/2022/10/12/images/4768f69dcb758257bccfb40b91c2a119.png)

Source: Galaxy Research

The Ordinals protocol, which was launched in January, saw modest growth in the initial months. According to a report by blockchain analytics firm Galaxy Research, the protocol has exploded since March, with nearly 35 million inscriptions minted as of September. It is worth noting that text inscriptions account for 95% of all minting.

! [Galaxy Research: Can Bitcoin Ordinals Continue to Grow?] ](https://cdn-img.panewslab.com//panews/2022/10/12/images/37d7481ddd342a128467431fb891667c.png)

Source: Galaxy Research

From January to September, the total trading volume of Bitcoin Ordinals reached $596.4 million. This makes Bitcoin the third most popular NFT exchange network, after Ethereum and Solana. Notably, the activity surrounding Ordinals resulted in the longest duration cycle of uncleared Bitcoin transactions since 2021. Even though BRC-20 tokens are excluded from Bitcoin Ordinals, Bitcoin still ranks third in NFT collecting activity. The data shows that the top 50 BRC-20 tokens account for only 30% of all Ordinals trading volume.

! [Galaxy Research: Can Bitcoin Ordinals Continue to Grow?] ](https://cdn-img.panewslab.com//panews/2022/10/12/images/033764b0eb60fbc35b2fb378ca03bb74.png)

Source: Galaxy Research

Ordinals exploded in the NFT winter

Galaxy Research noted that from February 2023 to August 2023, monthly NFT trading volumes continued to decline. August 2023 was especially tough for NFTs, with $500 million in transactions, down significantly from February 2023. In addition, Cryptoslam data shows that total NFT transaction sales in September 2023 were $294 million, the lowest level since January 2021. NFT sales fell 8.7% from $4.2 billion in September 2021 to $3.8 billion in October 2023.

However, even in the bear market of the NFT industry, Oridinals has gained a huge amount of attention. Ordinals accounted for 18% of all NFT trading volume in May. And despite fading from the limelight ever since, Ordinals has managed to provide a huge boost to Bitcoin's NFT activity.

Before Ordinals was widely accepted by major NFT platforms, platforms such as Ordinals Market, Ordinals Wallet, and Ordswap were leading the way in early 2023. That changed when Magic Eden started supporting Ordinals in March 2023, a major move as they were the first major NFT marketplace to do so. According to the chart provided, the leading markets for Ordinals by volume include Magic Eden, Unisat, and OKX, with market shares of 28%, 28%, and 38%, respectively.

! [Galaxy Research: Can Bitcoin Ordinals Continue to Grow?] ](https://cdn-img.panewslab.com//panews/2022/10/12/images/8221dd278627c7637bbc264656cfdd13.png)

Source: Galaxy Research

The frenzy of Ordinals drives up transaction fees

The madness of the Ordinals has also pushed network activity on the Bitcoin network to unprecedented levels. Ordinals trading volume peaked in May, mainly due to the large minting of BRC-20 tokens. BRC-20 is only a token standard, enabling users to issue transferable tokens directly through the network. Due to the high demand for block space, transaction congestion clogs the Bitcoin mempool. In fact, Galaxy Research notes that the deal jam has been around for about four months and hasn't been eliminated. This is the longest consecutive record for a mempool backlog since a bull market triggered a surge in on-chain activity in 2021.

! [Galaxy Research: Can Bitcoin Ordinals Continue to Grow?] ](https://cdn-img.panewslab.com//panews/2022/10/12/images/98d99de99938f3834de59d5fb4e1fa82.png)

Source: Glassnode

The increase in the number of unconfirmed transactions in the mempool prompts users to raise fees to jump in the queue, as miners are likely to include higher-fee transactions in blocks and ignore transactions below a certain threshold.

Whether the future of Ordinals is bright

The Ordinals ecosystem is constantly innovating and developing, including recursive inscriptions, stamp inscriptions, parent-child inscriptions, etc. Recursion provides a way to enhance interoperability within the Bitcoin framework. As Xverse explains, recursive ordinal inscriptions enable users to extract data from existing Bitcoin inscriptions and make new, unique inscriptions, and technologies such as stamps and paternity inscriptions are changing the way Ordinals are cataloged and verified.

The future of the Ordinals is promising, but they still have a long way to go. Bitcoin had significantly less minting activity than other chains in the first 200 days. The fact that other networks have a wealth of experience and well-established ecosystems in NFT trading helps somewhat.

! [Galaxy Research: Can Bitcoin Ordinals Continue to Grow?] ](https://cdn-img.panewslab.com//panews/2022/10/12/images/ddf017253ca5b3b7315071d0470321d6.png)

Source: Galaxy Research

While some skeptics view these NFTs as worthless digital collectibles, it cannot be denied that these blockchains (especially the Bitcoin chain) play a key role in driving the development of digital assets and collectibles.

The data proves that Bitcoin's continued impact proves the potential enduring value and importance of NFTs in the vast digital landscape. Considering that the inscription and serial number are still in their infancy, the prospects look promising, with the potential for more growth and even greater integration with Bitcoin. Galaxy Research even predicts that Bitcoin NFTs based on inscriptions and ordinal numbers could be valued at $4.5 billion by 2025. Obviously, this is just the beginning.