Bitcoin NFT signup activity has remained strong with consistency in the daily number of NFTs signed up for Bitcoin. At the same time, the infrastructure to foster Bitcoin trading is finally joining the development of wallets and marketplaces that support Ordinals.
NFT marketplaces Gamma and Magic Eden added support for Bitcoin NFT this week. Although the initial response from traders has been subdued, activity is expected to pick up soon.
Improving the infrastructure around Bitcoin NFTs
Bitcoin NFTs, also known as Ordinals, started with much fanfare in late January as they improved the utility and revenue of the Bitcoin blockchain.
Data analyst dgtl_assets’ Dune dashboard shows Ordinals sign-up activity remains strong, with nearly 580,000 NFTs signed up in less than three months.
While daily sign-up activity is brisk, Bitcoin NFT trading volume is still muted, which can be mainly attributed to the absence of supporting Bitcoin wallets and markets.
Ordinals require a specially designed Bitcoin wallet that recognizes content files in discernible satoshis, the smallest unit of Bitcoin, and facilitates their transfer. Hiro and Xverse are the leading wallet providers in the space.
Mark Hendrickson, Hiro’s product lead, told Cointelegraph that “active users of the wallet are up significantly overall this year, by around 350%.” Activity has picked up significantly since February, thanks to Ordinals hype.
On the other hand, Xverse added support for Bitcoin NFT on February 15.
So far, the Xverse Chrome browser extension has been downloaded in over 10,000 browsers, with Hiro’s download numbers exceeding 90,000. Hiro Wallet enjoys an advantage here as it was initially designed for the chain of Stacks blocks, a Bitcoin sidechain that supports smart contract capability.
markets come together
Since March 19, there has been considerable improvement in the space, with two leading markets, Gamma and Magic Eden, beginning to support Ordinals trading on March 20 and 22. So far, the markets have had a soft open with less than $1 million in trading volume in both venues.
By comparison, OpenSea has facilitated over $10 million in daily trading volume on Ethereum NFT trades alone on most days in Q1 2023.
Gamma users have completed around 182 Bitcoin NFT purchases since its launch. While Magic Eden has done close to 18.94 BTC (worth around $530,000) in volume since launch, with the Bitcoin DeGods Collection dominating volumes at 67%.
Related: Stacks (STX) Rises as Bitcoin NFT Hype Grows, But Its Blockchain Activity Raises Concern
In addition, Hendrickson noted that Magic Eden enjoys an advantage in “the cross-protocol department, given that they have previously implemented support for Solana, Ethereum, and Polygon. This could help meet cross-chain business needs faster, especially as it grows.” demand to move liquidity across chains to access their various NFT markets.”
At the same time, he noted that “Gamma has an edge among Ordinals markets given its deep focus on Bitcoin-based technologies.” Data provided by Hendrickson shows that the number of Hiro users interacting with Gamma increased significantly to around 2,144 weekly users as the hype around Bitcoin NFTs began.
Bitcoin NFT trading activity is expected to pick up. Ordinals provide superior security guarantees than NFT ecosystems elsewhere. The Ordinals digital media file is stored directly on the Bitcoin blockchain and enjoys the same security guarantees as regular BTC transfers. While other ecosystems like Ethereum store the NFT content archive on third-party storage solutions like AWS and IFPS. Hendrickson noted, “Its long-term durability is a big plus.”
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