Paving the way for a market value of 4.5 billion dollars in the next two years
Galaxy Research, a well-known crypto research entity, has released a report outlining the potential of Bitcoin’s non-fungible token (NFT) market. The research suggests that the market capitalization of the NFT market built on Bitcoin inscriptions and ordinals will reach $4.5 billion by March 2025.
Since December 14, 2022, over 200,000 inscriptions have been minted on Bitcoin. These digital cutouts can take the form of images, text, audio and even applications.
Each inscription can be connected to an ordinal, which is the smallest unit of BTC, creating a unique Satoshi (sat). While there are differences between inscriptions and NFTs, which leads to an increase in usage.
Recently, Yuga Labs, the world’s largest issuer of NFTs, announced TwelveFold, a new NFT pool issued on BTC. According to the report, new use cases will drive increasing interest and adoption of BTC.
The addition of significant data storage and strong availability assurances provided by inscriptions has opened up a number of use cases, including new types of decentralized software and BTC scaling techniques.
The Potential Impact of Bitcoin NFTs on Decentralization
Despite the potential benefits, the emergence of this new Bitcoin-native use case raises serious concerns about the long-term viability of the cryptocurrency.
The report states:
While many embrace this new design space, other Bitcoiners have concerns about its impact on Bitcoin’s decentralization.
The report highlights the opportunities and challenges that inscriptions and ordinals present, arguing that they create significant growth potential for the BTC ecosystem, improving “the fidelity and security of the overall BTC network.”
The emergence of a new ecosystem based on on-chain Bitcoin NFTs suggests great opportunities for growth. This is still a nascent ecosystem, but the infrastructure is growing rapidly.
Wallets should be at the top of the list of the most basic building blocks for a deep and liquid market. Several wallets, including the Sparrow wallet, Electrum, and Xverse, have emerged, offering UTXO selections for Ordinal collectors.
The report also mentions notable projects and companies, including Taproot Wizards, ORD Rocks, and Bitcoin Punks, which are among the most famous collections.
OpenOrdex uses partially signed bitcoin transactions (PSBTs) to create a trustless marketplace for buying and selling inscriptions. Together with Gamma and Ordinals.com, OpenOrdex offers transaction data, including ID, address, output value, weight, set number and location.
However, the report argues that the expansion of inscriptions, whether in the form of an NFT market or otherwise, could increase the likelihood of further BTC adoption, which could positively affect BTCUSD in the long run.
The emergence of the BTC-native use case suggests great opportunities for growth while raising questions about the future of decentralization. Nevertheless, infrastructure to support Bitcoin NFTs is emerging quickly, and the report claims that the potential for the BTC NFT market is huge and could be worth $4.5 billion by 2025.
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