$1.5 Trillion Global Investment Firm Cites Ordinals as Key Catalyst in Bitcoin Development Surge

2024-4-8 21:35

$1.5 Trillion global investment firm Franklin Templeton has identified Ordinals as a key catalyst in the recent surge of Bitcoin development.

In a report shared on Thursday, the firm highlighted the significant increase in innovation and development activity within the Bitcoin ecosystem, driven primarily by the rise of Bitcoin NFTs, or Ordinals, new fungible token standards, Layer 2s, and other Bitcoin DeFi primitives.

Notably, this increase in activity has seen a surge in Ordinals’ trading volume surpassing Ethereum, according to the California-based firm.

Unlike NFTs on other blockchains, Ordinals contain raw data inscribed directly on the Bitcoin blockchain. The protocol, enabled by Bitcoin’s Taproot update, encourages collecting satoshis (the lowest denomination of BTC) based on their rarity, adding utility to the Bitcoin network beyond conventional investment and monetary transfer uses. Thus, they challenge the traditional domain of NFTs, primarily associated with blockchains like Ethereum and Solana, whose NFTs are created using smart contracts.

This development is significant because, for years, Bitcoin developers sought to create a form of NFT on the Bitcoin blockchain but were not successful until the concept of Ordinals was introduced by Bitcoin developer Casey Rodarmor in late 2022.

Notably, since its inception, the Ordinals have gathered significant attention. Their total trading volume exceeded $6 billion on December 4, 2023, with Ordinals from collections like NodeMonke selling for over $1 million. Although that volume recoiled to $1.07 billion as of April 1, 2024, as per data from Messari, their rise indicates potential in the Bitcoin NFT space and the broader Bitcoin ecosystem.

Currently, more than a dozen platforms offer users the opportunity to mint and trade their Bitcoin NFTs. These platforms include reputable Bitcoin NFT marketplaces such as Gamma, Magic Eden, OKX NFT Marketplace, and Ordinals Market. Notably, in February, Binance, the world’s largest cryptocurrency exchange, unveiled a marketplace tailored explicitly for the inscription and sale of Ordinals.

That said, while the emergence of Bitcoin Ordinals presents exciting opportunities for innovation and development, Franklin Templeton also highlighted potential risks associated with blockchain and cryptocurrency investments.

“Blockchain and cryptocurrency investments are subject to various risks, including inability to develop digital asset applications or to capitalize on those applications, theft, loss, or destruction of cryptographic keys, the possibility that digital asset technologies may never be fully implemented, cybersecurity risk, conflicting intellectual property claims, and inconsistent and changing regulations,” wrote the firm.

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