The fad that won’t die

Jan 30, 2024

Over a year ago, Rodarmour released Ordinals. Since then, the small cohort of cryptocurrency investors who dislike all forms of digital collectibles have relentlessly disparaged the groundswell around Bitcoin tokens – both fungible and non-fungible – as a fad. The Cambridge Dictionary says a fad is “a style, activity, or interest that is very popular for a short period of time.”

Does this definition apply to Ordinals? Let’s take a look at data.

First, the raw sum of total inscriptions added to the Bitcoin network continues growing. Total inscriptions on Bitcoin is closing in on 60 million. Except for a short quiet period in October 2023, the daily inscriptions count added to Bitcoin has consistently ranged between 100,000 and 400,000 from April 2023 to date, according to Dune Analytics data. For a short-lived fad, that persistence is impressive.

In fact this cumulative inscribing activity has caused Bitcoin block fullness to not drop below 95% (very briefly) from February 2023 to date, according to data from Dune Analytics. Compared to block fullness oscillating between 30% and 60% for 2021 and 2022, this data is remarkable on its own.

Second, beyond the Blockchain base layer, marketplaces for collecting or exchanging various types of Ordinal inscriptions remain active.

  • Cumulative user count continues its “up only” growth.
  • Total volume has peaked and dropped and peaked higher again.
  • Nearly $2 billion in value has been exchanged.

In tandem with this growth are support for ordinals marketplaces by giants like Magic Eden (March 2023), Binance (May 2023) and OKX (May 2023).

In January, Sotheby’s also joined the party with a Bitcoin art auction that sold, among other items, a cat by the Taproot Wizards team for $254,000. These names are in addition to the many “native” marketplaces that support the Ordinals ecosystem, like Gamma, Ordswap, Unisat, and others. All of this support for a “short-lived fad” is probably noteworthy.

Third, miners are enjoying the onchain “fad” too. Data shared in a previous edition of the letter showed that fees as a percentage of revenue continues steadily climbing toward record highs not seen since the peak of the 2017 bull market.

To all of this information, the easy retort is “it’s only been one year!” Yes, that is true. But persistent growth over the past year coupled with unending cries of “it’s just a fad” suggest one party is wrong. The data is clear. Growth is consistent. Maybe the “fad” is actually a permanent fixture instead.

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