Bitcoin
Bitcoin Runes Resurgence? Why Asia’s institutional investors could drive growth
In cryptography, where most stories are reduced to a single line, the story of the Runes protocol – a framework optimized for creating meme coins about Bitcoin– it’s more or less like this: it started with a bang and disappeared, just as quickly, with a groan.
Almost a month has passed since the box office success of Runes debut next to the Bitcoin halved in April; and yet the protocol’s subsequent failure to meet high benchmarks has led many to dismiss the entire effort as a misfire.
But could the growing institutional enthusiasm for Runes in East Asia signal a possible second act for the developing protocol?
While mainstream talk about Runas has calmed in the West, the buzz in Asia around the protocol has only continued to snowball – especially among institutional investors and more centralized building teams who see it as a more sophisticated riff on the theme compared to the previous one. BRC-20 Fungible Token Standard.
BRC-20 tokens, the first wave of Bitcoin meme coins, created a lot of organic excitement when they took crypto by storm in 2023was born from an improvised adjustment to Bitcoin Ordinals code. Their debut was chaotic, highly experimentaland decentralized – the perfect storm for success in the cryptosphere.
The Runes protocol, on the other hand, has been implemented much more methodically, by a team of reputable engineers who focused on security, scalability, and easy-to-navigate build tools. In fact, it came from the original creator of the Ordinals protocol, Casey Rodarmor, who believed he could create a better fungible token protocol than the one he tinkered with his own previous code.
This emphasis probably hasn’t made much of an impression on degen traders yet. But investors in East Asia say it has already made a big difference for them.
“Runes is structured to potentially meet the stringent requirements of institutional investors, emphasizing scalability, efficiency and security,” said Ciara Sun, founder and managing partner of Asia-focused crypto investment firm C Squared Ventures. Decrypt. “This alignment could make Runes more attractive to a broader institutional base.”
Some Asian investment firms, such as Hong Kong-based Newman Group, have already taken the plunge into Runes. The company says it is actively promoting the development of Runes through portfolio companies such as Xverso It is Liquidgiven what the company sees as the potential for Runes to become a foundational infrastructure layer for the entire crypto industry.
“We believe Runes could end up being bigger than BRC-20, especially considering institutional interest,” said Adrian Lai, founder of Newman Group. Decrypt. “Runes’ technical advantages and potential for efficient cross-chain transactions could make it a preferred choice for institutions looking to access DeFi on Bitcoin.”
Some of the most prominent companies in crypto ever aligned behind the protocol. Leading Cross-Chain NFT Marketplace, Magic Eden released a dedicated Runes platform in April. OKX, one of Asia’s leading centralized crypto exchanges, hugged eagerly the protocol; was the first exchange of its kind to offer zero rate Rune trade.
Paige Xu, an investor at OKX, says Runes was almost perfectly designed to check off all the boxes on an institutional investor’s wish list. She particularly noted the protocol’s unspent transaction output (UTXO) model, which allows tokens to interact much more seamlessly with crypto wallets, layer 2 networks, and DeFi applications than BRC-20 tokens or Ordinals subscriptions can. at the moment.
“Runes has the right stuff – efficiency and a small blockchain footprint – that institutions typically look for in technology, which can handle heavy demand securely,” Xu said. Decryptadding that your personal views do not necessarily reflect those of your employer.
The investor noted, however, that Runes’ rise to dominance through institutional support is far from a done deal.
“The adoption of Bitcoin-based technology like this is still very new and largely depends on how well we can educate and integrate these assets into the broader financial world,” she said.
In the days following its release on April 19, interest in Runes skyrocketed; three days later, the protocol recorded more than a million transactions, according to on-chain data from Dune. Transaction volume plummeted by up to 90% in the following weeks, amid a broader period of reflection across the crypto ecosystem.
By the end of May, however, activity at Runas had more than tripled. For the first time, the total market capitalization of protocol assets reached $1 billion, according to GeniiData. This number has since eclipsed US$2 billionindicating that Runas may be enjoying a comeback (despite only being a month old).
There is no guarantee that institutional enthusiasm towards Runes will lead to the protocol dominating the crypto industry, as many have assumed. But if current sentiment in East Asia is any indication, then crypto’s biggest players are coming to the conclusion that there is only one path to the integration of fungible Bitcoin tokens – and that path runs through Runas.
“If issuing fungible tokens on the Bitcoin blockchain is the right decision, then deciding between Runes and BRC-20 comes down to which has a better chance of long-term viability and diversity,” MiXWeb3the pseudonym founder of Runes of China community, said Decrypt. “It makes the choice much clearer.”
Edited by Andrew Hayward