Crypto exchange Binance’s research arm highlighted the growth of BRC-20 tokens in its latest report, arguing that it’s one of the most important narratives of 2023 despite many being skeptical about Bitcoin Ordinal’s place in the Bitcoin ecosystem.
In its latest report, Binance Research said that BRC-20 tokens ushered in a “new era” for Bitcoin. The BRC-20 token standard, created early in March 2023, became very popular last year as meme tokens like Pepe (PEPE) were created using the standard. According to Binance, Bitcoin Ordinals inscriptions and BRC-20 tokens impacted Bitcoin’s growth and dominance in 2023.
Bitcoin demonstrating a 24% increase in market dominance in 2023. Source: Binance
Within the report, Binance noted that Bitcoin increased its market dominance from 40.4% to 50.2%, allowing the network to take over half the total market capitalization in the crypto space. The researchers pointed out that the network’s activity was “clearly impacted” by inscriptions and BRC-20 tokens, highlighting an increase in Bitcoin’s mempool transaction count.
Bitcoin mempool transaction count from Feb. 2021 to Dec. 2022. Source: Binance
A Binance Research spokesperson told Cointelegraph in a statement that the growth of BRC-20 tokens is an important Bitcoin narrative in 2023. The company believes it will continue to be an important topic for 2024.
“The rapid growth in market capitalization and the listing of the top BRC-20 tokens on major exchanges have been notable highlights which helped propel the market further.”
When asked about those who believe the Ordinals protocol has no place within the Bitcoin ecosystem, the spokesperson said that Bitcoin is decentralized and permissionless. It can be used as the community decides. “It is not for one person or group to say what the technology can be used for.”
In addition, the Binance Research spokesperson also highlighted that from an economic perspective, Ordinals and BRC-20 tokens helped lead to higher transaction fees, which are "helpful for miners" who will be impacted by the upcoming Bitcoin halving in 2024.
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