Runes, a Bitcoin-based non-fungible token (NFT) protocol, is gaining traction as its transaction volume surged recently. Data from Dune Analytics indicates that Runes is regaining a significant share of overall Bitcoin network transactions, a welcome development for both the protocol and Bitcoin miners.
Runes transaction volume increases
The transaction volume for Runes has experienced notable growth over the past week. According to data compiled by Cryptokoryo, Runes accounted for about 25% of all Bitcoin network transactions during this period. The protocol peaked at 19.4% on October 7 but decreased to approximately 12% by October 10. Although this is significantly lower than its performance in April 2024, when it represented over 60% of transactions, this uptick suggests a recovering interest in Runes.
Interestingly, other Bitcoin-based protocols, including Ordinals and BRC-20, did not experience similar transaction increases. While BRC-20 achieved a 4% transaction share on October 6, it plateaued shortly after. The rise in Runes activity is unique to the protocol amidst a stagnant environment for other NFT projects on the Bitcoin network.
Price surge and market sentiment
The rise in Runes transactions seems linked to the increased value of various Runes tokens. Data from Magic Eden reveals that several tokens, including DOG, RSIC, BILLION, and DECENTRALIZED, have all recorded double-digit price increases over the past day. Notably, LOBO experienced the most substantial gain of 49%, while BAMK and DECENTRALIZED rose by 41% and 37%, respectively. DOG, the most significant Rune token by market capitalization, saw an increase of 28%, pushing its market cap above $500 million.
Despite the price surge, overall trading volume remains relatively low, with DOG reaching just $1.58 million. The entire Runes protocol has an on-chain volume of around $5.3 million. Speculation suggests that DOG might be listed on a significant tier-1 exchange soon.
Bitcoin Runes Volume (Source: Magic Eden)
Market sentiment around Runes is mainly bullish, with volume reportedly doubling this week. A significant factor contributing to this optimism is the Swaps feature for Runes tokens on Magic Eden, which is expected to launch by the end of October. This feature could enhance trading capabilities for Runes. Additionally, a resurgence of memecoins on platforms like Solana and Ethereum may benefit Runes, as these tokens are often categorized as memecoins due to their lack of intrinsic value.
Increased miner fees amid rising transactions
The growing transaction volume for Runes also benefits Bitcoin miners, who anticipate increased revenue from these transactions. As of October 6, Runes represented over 12% of the total fees on the Bitcoin network. This share declined to 9% by October 10. However, miners have reported a significant fee rise, increasing by 32.4% this week to reach $5 million. This increase provides much-needed relief to miners, especially in light of recent challenges due to declining block rewards.
Bitcoin has experienced notable volatility in the last few days, with a gain of nearly 7% today. After dipping to around $59,000 yesterday, Bitcoin has climbed back to approximately $63,000, marking a 10% increase over the past 30 days. This upward trend suggests a stabilization in Bitcoin’s price despite various events threatening its decline. Analysts speculate that the recent extension of the refund claim period for Bitcoin held by the Mt. Gox exchange administrators until 2025 may have alleviated some selling pressure.
This combination of increased transaction volume for Runes and heightened miner fees reflects a dynamic shift in the Bitcoin ecosystem, signaling potential growth and opportunities for investors.