Bitcoin Ordinals and the Runes Protocol, despite initial success, are showing signs of decline. Ordinals, a Bitcoin-based NFT protocol, debuted in 2023 and saw daily trading volumes above $20 million for most of the year. However, the number of Ordinal inscriptions has significantly dropped in 2024. Similarly, the Runes Protocol, which generated a record $135 million in fees in its first week, now accounts for only 4.1% of total transactions on Bitcoin.

These Bitcoin-native innovations have not lived up to the hype, with some viewing them as opportunistic crypto innovations. Ordinals were notorious for causing a surge in Bitcoin’s fees, with the average transaction fee rising by 560% in May 2023. The Runes Protocol also pushed Bitcoin’s 7-day average transaction fee from $4.11 to $12.17.

While both Ordinals and Runes have potential to bounce back, there are more fundamental innovations defining Bitcoin’s use case. Bridging solutions such as Wrapped Bitcoin, which integrates BTC with Ethereum’s DeFi ecosystem, and Bitcoin Layer 2 chains, are improving the Bitcoin blockchain. The market cap of Bitcoin Layer 2 coins is currently over $2.7 billion, indicating that there’s more to the Bitcoin blockchain than the recently hyped Ordinals and Runes.