The Bitcoin ecosystem represents one of the few narratives with genuine technical innovation in this market cycle. It has experienced three distinct bull runs during the bear market, demonstrating remarkable resilience and continued growth.
As the ecosystem celebrates its second anniversary, this article reflects on these three mini-cycles and pays tribute to the builders and believers who have remained dedicated to Bitcoin's evolving landscape.
The Birth of the Bitcoin Ecosystem
The Ordinals protocol officially launched on December 14, 2022. Its creator, Casey Rodarmor, inscribed the very first inscription, now known as inscription #0. This moment marked the beginning of on-chain activity for Bitcoin beyond simple transactions.
The Ordinals protocol can be understood as a system for inscribing data onto individual satoshis. This data can include images, text, JSON, GIFs, HTML, and more. Ordinals emerged during the absolute bottom of the bear market. The broader crypto space was silent, and with little promotion, very few people were initially aware of its existence.
By early February 2023, only slightly over 10,000 inscriptions existed (compared to over 80 million today). Most of these early inscriptions were images, though some were GIFs, HTML files, and other formats. They were largely scattered images created by individual users, alongside a few small collections numbering between 50-200 items.
It was around this time that holders from the CryptoPunks community initiated an effort to inscribe "Bitcoin Punks" on Ordinals, downloading the pixelated CryptoPunks images to inscribe themselves.
Bitcoin Punks became the first 10K NFT collection on Ordinals. Its arrival was a seismic event that introduced many, including myself, to the Ordinals protocol. The concept was revolutionary: you could inscribe an NFT directly onto the Bitcoin blockchain! This meant immutable, permanent existence, with each inscription receiving a unique, time-stamped number. It was a completely new and disruptive narrative. Bitcoin, previously seen only as a peer-to-peer cash system, could now support on-chain data.
The excitement was palpable, reminiscent of the early fervor in 2017 about blockchain technology changing the world. For the subsequent months, many of us immersed ourselves completely in the Bitcoin ecosystem.
This was the first major wave of awareness for Ordinals within the crypto community. Everyone rushed to acquire Bitcoin Punks. The infrastructure was nearly non-existent, lacking the tools and inscription services common today. Inscribing a Bitcoin Punk required running a full Bitcoin node and technical know-how. Despite these barriers, Bitcoin Punks were fully inscribed within a matter of days. The inscription count surged from 10,000 to 30,000 in less than a week.
Although not an original collection, Bitcoin Punks established two fundamental rules for the ecosystem:
- First is First: Since anyone can inscribe an image on Bitcoin without a smart contract, a method was needed to determine authenticity if two identical images were inscribed. Bitcoin Punks established the "First is First" principle, meaning only the earliest inscription (the one with the lower number) is recognized as the authentic version.
- Fair Launch (Fair Mint): Bitcoin Punks were not pre-minted and distributed by a project team. Instead, users inscribed them themselves. This pioneered the concept of a fair launch in the Bitcoin ecosystem, setting a precedent for future protocols like BRC-20 and Runes, and even influencing fair launch models on other chains.
The First Mini-Bull Run: NFTs (Feb-Mar 2023)
The火爆 of Bitcoin Punks triggered the ecosystem's first mini-bull run, focused on NFTs. This period lasted from early February to March 2023.
The floor price of Bitcoin Punks rose from 0.2 ETH to 2 ETH (roughly 0.12 BTC at the time). "Sub 10K" collections (inscriptions within the first 10,000) like Block Munchers were sold OTC for up to 1.2 BTC. Collections like Inscribed Pepe reached a floor of 1.6 BTC, and early "Sub 1K" collections like Ordinal Punks even commanded over 2 BTC.
Early infrastructure was sparse. Buying a Bitcoin Punk was difficult, requiring OTC deals negotiated in Discord channels, with moderator fees sometimes as high as 0.1 ETH. Despite this, demand was intense due to rapid price appreciation. Many early proponents, including the founder of what would become the Runes token $DOG, accumulated significant holdings during this time.
Soon, the first marketplaces like ordinals.market, ordinalswallet, and ordswap (which later exited) emerged, providing dedicated platforms for trading Bitcoin NFTs and fueling another price surge.
The hottest assets were Bitcoin Punks and Sub 10K NFTs. While Bitcoin Punks saw the highest volume, Sub 10K assets were often illiquid. The number of high-quality Sub 10K collections was small, making acquiring a desired piece a difficult task akin to digital archaeology, requiring deep immersion in various Discord communities to find willing sellers.
The First Bear Phase (Mar-May 2023)
After March, the market became saturated with new NFT projects, supply outstripped demand, and a two-month bear market ensued. This period, though characterized by depreciating portfolio values, was a time of strong community building and unwavering belief in the ecosystem's potential.
Nightly Twitter Spaces were filled with OG builders discussing not just profits, but also the future and possibilities of Ordinals. This collective included founders of major wallets, community moderators, project creators, and influential collectors. The atmosphere was one of aligned vision and idealistic building.
Two critical developments during this period changed the ecosystem's trajectory:
- The SATS Name Protocol: Launched in late February 2023 around inscription #160,000, the SATS protocol became the first domain name system supported by wallets like UniSat and Xverse. Its significance lies in its adherence to "First is First" and "Fair Launch" principles while pioneering the use of JSON inscriptions. Unlike Ethereum naming services, SATS has no central company, is permanently free to use, and is directly usable in wallet address fields. It served as a direct inspiration for the next major innovation.
- The Birth of BRC-20: An engineer named Domo, inspired by the SATS protocol, proposed a token standard using JSON inscriptions, dubbing it BRC-20. The first token, $ORDI, was deployed by Domo himself at inscription #348,020. Domo initially viewed it as an experimental idea and advised against FOMO.
The BRC-20 protocol was admittedly simple and inefficient, generating significant UTXO bloat and "junk" inscriptions. Initial reception was largely skeptical. However, degens with a keen sense for opportunity seized the moment. The entire supply of 21,000 $ORDI inscriptions was minted within two days at a cost of roughly 2-3 USD per inscription (or $0.003 per $ORDI token).
With no infrastructure or exchanges, early trading occurred via OTC in WeChat groups. The price rose gradually, reaching around $50 per inscription ($0.05 per token) by late April—a 20x increase from mint cost, for a market cap of just ~$1M. The narrative of "$ORDI as Bitcoin's first native fungible token" eventually cut through the noise, highlighting its historic "first" status and collectible value, regardless of technical shortcomings.
The Second Mini-Bull Run: BRC-20 Mania (May-June 2023)
The rise of BRC-20 is largely thanks to UniSat Wallet. Without its relentless building, the standard might have faltered. When UniSat launched its BRC-20 indexer and marketplace in May, prices soared. $ORDI reached $0.30 per token—a 100x increase from its mint price.
A major bug was soon discovered in UniSat's marketplace, allowing a double-spend exploit that defrauded users. UniSat's response was decisive: full reimbursement of all lost funds. This incident made headlines across crypto media, inadvertently providing massive publicity for Bitcoin Ordinals and BRC-20.
The message was clear: there was a new casino on Bitcoin, and its name was BRC-20. A wave of gamblers flooded in.
On May 8, Gate.io listed $ORDI, pumping its price to nearly $30 and cementing its 10,000x myth from mint. OKX listed it on May 15, though the price never reclaimed its prior high. Around the same time, Binance launched its Ordinals NFT marketplace (recently shuttered).
Activity was so frenetic that Bitcoin transaction fees skyrocketed to over 500 sats/vbyte. Nearly every newly minted BRC-20 token would immediately flip for multiples. Following the BRC-20 frenzy, attention returned to NFTs. Collections like Bitcoin Frogs, which had languished at 0.002 BTC in March, surged to 0.12 BTC—a 60x gain in BTC terms—becoming one of the largest collections by market cap.
This shift signaled a change in NFT market dynamics. The community realized that small, low-numbered collections like Sub 10K, while great for收藏 (collecting), had limited user bases for speculation. Larger 10K collections could foster stronger cultural communities and consensus, making them better suited for trading.
The success of BRC-20 spawned numerous alternative "JSON-based" token standards, mirroring the explosion of altcoins after Bitcoin's creation. Protocols like ORC-20, BRC-100, and SRC-20 (on the separate Stamps protocol) emerged. The "inscription" concept also spread to other chains like Dogecoin (DRC-20) and Ethereum (ETHS).
The era of "inscribing everything" had begun. The hype even extended to inscribing on "rare sats," with uncommon sats selling for ~$1,200 and rare sats commanding prices as high as 10 BTC.
This wave of activity lasted about a month before succumbing to oversaturation and a lack of incoming capital, reminding everyone that the broader crypto market was still in a bear phase.
Continued Building in the Quiet (June-Oct 2023)
From June onward, the market quieted down. Bitcoin transaction fees crashed back to 1 sat/vbyte. However, building and innovation continued:
- The 21 million inscriptions for the $SATS BRC-20 token were slowly minted, expected to conclude around October 2023.
- The Ordinals protocol underwent technical upgrades, introducing parent-child inscriptions, recursive inscriptions, and properly categorizing "cursed inscriptions."
- The Bitmap metaverse project emerged, parceling land based on Bitcoin block data.
- The Merlin team began building the BRC-420 protocol and the Bitcoin Layer-2 solution, Merlin Chain.
- The Atomics Protocol (ARC-20), separate from Ordinals, gained traction. It uses a "colored coin" model (1 token = 1 satoshi) for more efficient Bitcoin-like transfers.
- Casey Rodarmor announced development of the Runes protocol.
It's worth noting Casey's original vision for Ordinals was a "museum/library" on Bitcoin. The explosion of BRC-20, with its significant drawbacks, was an unintended diversion.
BRC-20's key flaws include:
- UTXO and Inscription Bloat: BRC-20 uses inscriptions as single-use ledger entries. After minting or transferring, the old inscription becomes junk, wasting inscription numbers and clogging the "museum" with garbage. Each also occupies a UTXO, complicating wallet management.
- Inefficient Transfers: A BRC-20 transfer requires first inscribing a transfer message (paying an inscription fee + network fee) and then sending that inscription (paying another network fee). This two-step process is slower and more expensive than a native Bitcoin transfer.
Casey aimed to create a token protocol that avoided these issues: one that doesn't bloat UTXOs, doesn't generate junk inscriptions, and enables Bitcoin-like transfers. This vision became the Runes protocol.
The Third Mini-Bull Run (Nov 2023 - Apr 2024)
This bull run was ignited on November 6, 2023, when Binance listed $ORDI and $SATS. The entire crypto space once again plunged into a frenzy of minting inscriptions, but on a much larger scale than in May. New BRC-20 tokens, like $RATS, created significant wealth for many.
By March 2024, $ORDI peaked near $97, achieving its mythic ~30,000x gain from mint. $SATS reached ~$94 per inscription (~300x gain), and $RATS reached a ~$600M market cap (~200x gain). Assets on other protocols, like ARC-20's $ATOM and $QUARK, also surged. Even long-dormant SRC-20 tokens saw massive pumps.
Every asset in the Bitcoin ecosystem saw astronomical gains. This bull run mirrored the May 2023 flow of capital: first into BRC-20s, then into alternative protocol tokens, and finally into NFTs—but it lasted significantly longer.
In late December, NodeMonkes launched via a Dutch auction, reshaping the NFT landscape. The market realized that NodeMonkes (inscriptions #83,522–111,319), not Bitcoin Frogs, was the first original 10K collection. It reclaimed the powerful "First" narrative, and its floor price soared from 0.03 BTC to 0.9 BTC by March 3, 2024—a 30x gain in BTC terms. A rare Alien NodeMonke sold for 17 BTC (~$1.1M at the time), setting a record for the most expensive Bitcoin ecosystem asset. NodeMonkes' success lifted the entire NFT market.
Concurrently, Merlin Chain launched its Layer-2 staking, accepting a wide array of Bitcoin assets (NFTs, BRC-20, BRC-420) for deposit. As a pioneer in Bitcoin L2, it kicked off the "BTCfi" narrative, ultimately providing users with substantial staking rewards.
On the Runes front, Casey had long announced the protocol's launch would coincide with the Bitcoin halving in April 2024. In January, the RSIC project innovated with a "pre-rune" airdrop and mining mechanic, brilliantly gamifying rewards and speculation. This spawned many imitators, including what became the leading Rune, $DOG. RSIC and $DOG were valued at $400-500M even before the Runes protocol went live.
From February through the April halving, the market was utterly fixated on Runes. The consensus was that Runes would be the revolutionary token protocol for Bitcoin, triggering the next massive wave. However, excessive hype often leads to disappointment.
The Runes Launch and Subsequent Cooling (May 2024 - Present)
The Runes protocol launched at the halving. While it saw initial activity, the fervor died down within about 10 days—a shorter lifespan than the initial BRC-20 boom.
Several factors contributed to this:
- Overhyped: Expectations were impossibly high, and the market had already priced in significant value through pre-launch meta-protocols like RSIC. Many used the launch as an exit liquidity event.
- Lack of Fair Launches: Few of the first 100 Runes were fair launches; most had significant pre-allocations, reducing user engagement and perceived fairness.
- Cumbersome Naming: Rune names must be at least 13 characters long, only reducing by one character every 4 months. This odd, aesthetic choice by Casey made many tokens appear long and unwieldy.
- The Genesis Rune (0): Casey designated the first Rune, •▲⎊‚ (UNCOMMON•GOODS), with a 4-year mint period. This design choice removed the short-term speculative appeal for many degens looking to play the current cycle.
While technically more elegant than BRC-20, Runes' unique minting rules and naming conventions reflected Casey's personal engineering ethos, for which the market had little immediate appetite.
Since May, the market has cooled significantly:
- $ORDI dropped from $97 to a low of ~$20.
- $SATS dropped from $94 to a low of ~$11.
- NodeMonkes fell from 0.9 BTC to 0.09 BTC.
- Bitcoin Frogs declined from 0.43 BTC to 0.028 BTC.
- Runes tokens trended downward steadily.
- Assets on other alternative protocols became largely illiquid again.
The Bitcoin ecosystem has experienced an accelerated version of the typical crypto cycle, with three bull and bear phases within just two years.
In early November 2024, Bitcoin ignited a roaring bull market. While nearly every other sector and even long-forgotten altcoins have surged since, the Bitcoin ecosystem has, so far, remained relatively dormant.
Frequently Asked Questions
What is the Ordinals protocol?
Ordinals is a protocol that allows users to inscribe data like images, text, or JSON onto individual satoshis (the smallest unit of Bitcoin). This creates unique, immutable digital artifacts directly on the Bitcoin blockchain, enabling NFTs and other token standards.
What is the difference between BRC-20 and Runes?
BRC-20 is an early, simple token standard that uses JSON inscriptions. It is inefficient, causing blockchain bloat. Runes is a more technically advanced protocol developed by Ordinals creator Casey Rodarmor. It aims for efficiency, avoiding UTXO bloat and enabling simpler, Bitcoin-like transfers, though its initial launch was met with mixed reception due to its unique mechanics.
What was the first major NFT collection on Bitcoin?
Bitcoin Punks, inscribed in early 2023, was the first major 10K NFT collection and introduced key concepts like "First is First" and "Fair Launch" to the ecosystem. However, NodeMonkes is now recognized as the first original 10K collection.
Why is the 'First is First' principle so important?
Because Bitcoin inscriptions lack smart contracts for authentication, the "First is First" rule provides a simple, decentralized method for establishing authenticity and provenance. The earliest inscribed version of an image or asset is considered the legitimate one, which is crucial for determining value and ownership.
What is the future of the Bitcoin ecosystem?
The future appears focused on scaling and financialization. This includes the development of Bitcoin Layer-2 solutions (like Merlin) to improve scalability, the growth of "BTCfi" (DeFi on Bitcoin) using protocols like Runes, and continued experimentation with metaverses, gaming, and other use cases built on top of the Ordinals and Atomics standards. 👉 Explore more strategies for navigating crypto narratives
How do I get started with Bitcoin NFTs or tokens?
You typically need a compatible Bitcoin wallet that supports the Ordinals protocol (such as UniSat or Xverse). From there, you can inscribe assets yourself (which requires technical knowledge and BTC for fees) or use a marketplace to buy, sell, and trade existing inscriptions. Always conduct thorough research (DYOR) before connecting your wallet or purchasing assets.