The data shows that the Binance nft marketplace wasn't really a popular destination for Ordinals anyway, and traders are now obsessed with Runes.
Binance's decision to remove support for Ordinals in April raised eyebrows among bitcoin enthusiasts.
The embattled exchange, which has been fighting legal battles on multiple fronts in recent months, said the move was designed to “simplify” its product offering.
He went on to warn anyone who has bitcoin nfts to move them elsewhere so they can remain eligible for airdrops.
This marks a rather sudden U-turn from Binance, which is the largest crypto platform in terms of trading volume.
Ordinals only became technologically possible early last year and allow inscriptions to be made in a single satoshi, the equivalent of one-hundredth of a bitcoin.
As a result, images, videos and other forms of data can now be attached to sats, but critics claim this only serves to clog the bitcoin blockchain.
Last May, Binance head of product Mayur Kamat said:
“bitcoin is the OG of cryptocurrencies. “We believe things are just getting started here and we are excited to see what the future holds in this space.”
Mayur Kamat
So what is the reason for this dramatic change? Will this serve as a crushing blow to the future of the Ordinals?
How are the ordinals going?
Binance officially ended support for Ordinals on April 18, meaning they could no longer be traded through the platform's nft marketplace.
Data of bitcoin?headerPeriod=7d&timeFrame=day” target=”_blank” rel=””>CryptoSlam! This shows that there has been a marked drop in Ordinals sales volumes, as well as the number of unique buyers and sellers, since then.
<img loading="lazy" decoding="async" width="1024" height="233" src="https://crypto.news/app/uploads/2024/04/Screenshot-2024-04-30-at-10.06.00-1024×233.png” alt=”Why did Binance abandon Ordinals? Will the market survive? – 1″/>
Sales volumes reached $28.2 million on April 19, with 9,469 unique buyers and 9,728 unique sellers in total.
A week later, as of April 26, revenue had fallen to $11.4 million. Meanwhile, the number of buyers and sellers had more than halved, to 4,722 and 4,515 respectively.
However, it is important to emphasize that correlation does not imply causation and that there are other factors at play here.
For one thing, April 19 officially marked bitcoin's last halving, in which block rewards fell from 6.25 to 3.125 btc. Traders have been worried about other things.
But secondly, the halving also led to the launch of Runes, a new standard that allows fungible tokens (like ERC-20 on ethereum) to be implemented more efficiently on bitcoin.
Data of Dune analysis It powerfully explains what happened during the second half of April:
<img loading="lazy" decoding="async" width="1024" height="377" src="https://crypto.news/app/uploads/2024/04/Screenshot-2024-04-30-at-10.19.35-1024×377.png” alt=”Why did Binance abandon Ordinals? Will the market survive? – 2″/>
As of April 19, Ordinals had a 6.5% share of transactions on the bitcoin blockchain.
A day later, when Runes made its debut, Ordinals accounted for just 0.4% share as frenzied demand for memecoins skyrocketed.
The hot pink in the chart above represents the daily transaction share of Runes, which reached a staggering 73.5% share on launch day.
Put another way, Binance is not the only one to blame for the decline in demand for Ordinals: Runes is stealing their lunch money.
What's next for ordinals?
Ordinals collectors are unlikely to lose much sleep over Binance's exit from the market, especially considering the exchange has been banned or severely restricted in 20 countries around the world. They include Canada, China, Japan, Italy, Australia, the United Kingdom and the United States.
More dune analysis boards show that Binance's nft platform wasn't really a popular destination for Ordinals anyway.
On April 29, two exchanges, OKX and Magic Eden, handled 94% of the transactions between them.
<img loading="lazy" decoding="async" width="1024" height="409" src="https://crypto.news/app/uploads/2024/04/Screenshot-2024-04-30-at-14.24.33-1024×409.png” alt=”Why did Binance abandon Ordinals? Will the market survive? – 3″/>
One could argue that this amounts to Binance placing its resources in areas where it can actually gain greater market share.
The biggest question now is this: Will Binance implement support for Runes anytime soon?
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As trading volumes continue to rise for newly launched memecoins on the bitcoin network, it seems inevitable that Binance will want a piece of the pie.
With exchanges engaged in a brutal price war to remain competitive in transaction fees, trading platforms are always looking to diversify their revenue streams.
Demand for Ordinals may have slowed in recent weeks, but bitcoin remains the second-largest blockchain in nft sales volume, far ahead of Solana, and ethereum recently returned to the top spot.
If appetite for bitcoin nfts picks up, Binance's decision not to offer Ordinals through its marketplace may prove short-sighted.
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