Cointelegraph NFT

Improving Bitcoin NFT marketplace infrastructure sets the stage for ecosystem growth

Bitcoin NFT inscription activity continues to rise and the launch of new BTC specific marketplaces could lay the groundwork for the next hype cycle.

Bitcoin NFT inscription activity has remained strong with consistency in the daily number of NFTs inscribed on Bitcoin. At the same time, the infrastructure to foster Bitcoin trading is finally coming together with the development of wallets and marketplaces supporting Ordinals.

NFT marketplaces, Gamma and Magic Eden, added support for Bitcoin NFTs this week. While the initial response of traders has been subdued, the activity is expected to pick up soon.

Improving the infrastructure around Bitcoin NFTs

Bitcoin NFTs, also-known-as Ordinals, began with much fanfare in late January as they enhanced the utility and revenue of the Bitcoin blockchain.

Dune dashboard from data analyst dgtl_assets shows that the Ordinals inscription activity remains robust, with nearly 580,000 NFTs inscribed in less than three months.

*Cumulative sum and number of daily BTC NFTs inscribed. Source: Dune*

While the daily inscription activity is vigorous, the trading volume of Bitcoin NFTs is still muted, which can be primarily attributed to the absence of Bitcoin wallets and supporting marketplaces.

Ordinals require a specially designed Bitcoin wallet that recognizes content files on discernable satoshis, the smallest unit of Bitcoin, and facilitates its transfer. Hiro and Xverse are the leading wallet providers in the space.

Mark Hendrickson, the product lead at Hiro, told Cointelegraph that the “active users for the wallet are up significantly in general this year, around 350%.” The activity picked up significantly since February, thanks to the Ordinals hype.

On the other hand, Xverse added Bitcoin NFT support on February 15.

So far, the Xverse Chrome browser extension has been downloaded on over 10,000 browsers, with Hiro’s download numbers surpassing 90,000. The Hiro wallet enjoys an advantage here as it was initially designed for the Stacks blockchain, a Bitcoin sidechain that supports smart contract ability.

Marketplaces come together

Since March 19, there has been considerable improvement in the space, with two leading marketplaces, Gamma and Magic Eden, beginning to support Ordinals trading on March 20 and March 22. So far, the marketplaces have met with a soft opening with less than $1 million in trading volume on both venues.

In comparison, OpenSea has facilitated more than $10 million in daily trading volume on Ethereum NFT trades alone on most days in the first quarter of 2023.

Gamma users have completed around 182 Bitcoin NFT purchases since launch. Whereas Magic Eden has done close to 18.94 BTC (worth around $530,000) volume since launch, with the Bitcoin DeGods collection dominating volumes by 67%.

Additionally, Hendrickson noted that Magic Eden enjoys an advantage in “the cross-protocol department given that they’ve previously rolled out support for Solana, Ethereum and Polygon. This could help serve cross-chain trading needs faster, especially as demand increases for moving liquidity across chains to access their various NFT markets.”

*Bitcoin Ordinals top collections on Magic Eden. Source: Magic Eden*

At the same time, he noted that “Gamma has an advantage among Ordinals marketplaces given their deep focus on Bitcoin-based technologies.” Data provided by Hendrickson shows that the number of Hiro users interacting with Gamma surged significantly to around 2,144 weekly users as the hype around Bitcoin NFTs kicked off.

*Number of Hiro clients that connected their wallets to Gamma. Source: Hiro*

The Bitcoin NFT trading activity is expected to pick up. Ordinals provide superior security guarantees than NFT ecosystems elsewhere. The digital media file of Ordinals is stored directly on the Bitcoin blockchain and enjoys the same security guarantees as regular BTC transfers. Whereas other ecosystems like Ethereum store the content file of the NFT on third-party storage solutions like AWS and IFPS. Hendrickson noted, “Their long-term durability is a huge advantage.”

The views, thoughts and opinions expressed here are the authors’ alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.

Stacks (STX) surges as Bitcoin NFT hype grows, but its blockchain activity raises concern

The possibility of hosting Bitcoin NFTs on Stacks pushed STX price to new yearly highs, but there are concerns on whether the bullish thesis becomes reality.

Stacks is one of the first blockchains to enable a way for minting Bitcoin (BTC) Ordinals, which puts it in an excellent position to benefit from the hype. However, Ordinals have invoked an issue from the past where Bitcoin maximalist ideologies will be tested if the NFTs lead to network congestion.

On top of that, Stacks has yet to deliver all the functionalities required to support an NFT trading ecosystem and it faces competition from projects in other blockchain ecosystems. The fundamental and technical analysis of the project suggests that the price surge might have reached overbought conditions and may correct in the near term.

Ordinals development is unpredictable for now

The recent focus on inscribing NFTs on the Bitcoin network peaked in the last month after Casey Rodarmor inscribed an Ordinal on Jan. 29. While the trend took off to an overwhelming start, the minting is limited to technical users with a Bitcoin node and trading primarily takes place through OTC channels.

In comparison to Ethereum NFT marketplaces, the infrastructure for Bitcoin NFT trading remains significantly underdeveloped in regards to complex activities like decentralized trading. Many investors have expressed their belief that there needs to be a way to spin up marketplaces and NFT minting platforms for Ordinals.

The Bitcoin developer community has previously discouraged using the network for anything other than payments because it clogs the space and increases transaction fees. In the bull run of 2020 and 2021, many Ethereum users paid hundreds of dollars in fees per transaction as user activity on it exploded. On the other hand, Bitcoin’s fees stayed at optimum levels throughout the bull run, but the usage and earnings of the protocol lagged behind Ethereum.

According to a CoinShare report, the adoption of Ordinals will again be subject to the social acceptance of the method to inscribe additional data on the Bitcoin blockchain, which is bound to present challenges such as network congestion and increased fees.

The report goes on to review previous failed attempts to use the Bitcoin blockchain for smart contract activity, saying that “similar projects of Bitcoin’s past have had little impact on investors and users alike.”

The number of Ordinals inscribed on Bitcoin surged significantly at the start of February as the instrument exploded. However, the trend slowed down due to a lack of trading infrastructure, with less than 10,000 NFTs inscribed on most days.

Stack blockchain’s native STX (STX) token jumped by 256% in February, thanks to hype around Bitcoin NFTs and an upcoming upgrade to the project.

Number of ordinals inscribed on Bitcoin daily. Source: Dune

It remains to be seen how the Bitcoin community reacts to an increase in network congestion and Bitcoin fees if the Ordinals hype grows.

Stacks price rises on speculation, while activity is low

The idea is that Stacks will make Bitcoin Ordinals more accessible to users by facilitating minting processes and hosting marketplaces.

Stacks Foundation, the team managing the blockchain, on Feb. 22 announced a new upgrade to the protocol, Stacks 2.1, which seeks to improve the blockchain by adding EVM compatibility and synthetic Bitcoin (sBTC) through a secure bridge to Bitcoin.

On top of that, the .BTC naming service lives on the Stacks network, which could generate a lot of trading activity if the demand for .BTC addresses increases. In its current state, a .BTC Stacks address is largely detached from the Bitcoin network. Meaning, users cannot send and receive Bitcoin at these addresses like its .ETH counterpart.

After the 2.0 upgrade, Stacks will enable direct sending of Stacks assets to Bitcoin addresses. It will enable proxy access to the Bitcoin blockchain without creating a separate Stacks address. It remains to be seen if Bitcoin users find the feature attractive.

While the upgrades sound promising, there’s still insufficient blockchain activity to justify the STX price surge. Only around 1,000 unique active wallets engaged with DApps on Stacks in February. The most striking part of Stack’s usage data was that the NFT marketplace Gamma also failed to attract considerable users to its platform, with less than 100 wallets trading daily on the marketplace.

Top used dApps on Stacks between Jan. 28 and Feb. 27. Source: DappRadar

Gamma supports minting and sending Bitcoin ordinal NFTs via Stacks. However, many users have faced UX-related problems while using the feature, as it requires a separate address in a Stacks wallet that is Ordinal compatible. Many users have mistakenly sent their NFTs to wrong addresses. The wallet issue has also restricted the trading of Bitcoin NFTs.

Gamma NFT marketplace stats. Source: DappRadar

Developers in the Stacks ecosystem, like the Xverse team, are working on a wallet to bring user-friendly Ordinals support. There’s also an experiment with atomic swaps between Bitcoin NFTs and STX in the works. The aim is to develop this functionality into a complete marketplace.

However, other ecosystems are also looking to bank on this trend. For instance, Ordinex is developing an Ordinals trading platform, which will be accessible for Ethereum users through Metamask. Some Ethereum native projects, like OnChainBirds and SappySeals, have also inscribed the NFTs on Bitcoin and enabled trading on OpenSea. However, the trading activity of these collections remains average, with little hype.

Besides Stacks, many other ecosystems are trying to bank on the opportunity by facilitating Bitcoin NFTs. While Stacks enjoys a technical advantage over others, Ethereum has a loyal user base and adequate liquidity to outperform Stacks’ ecosystem if a feasible solution emerges. Moreover, in the end, it will depend on the response and demand of these NFTs from the Bitcoin community, which may not support euphoria around it.

STX/USD reaches key resistances zones

The STX token dilutes at the rate of 2.5% annually. The inflation will reduce after the Bitcoin halving, which is expected to occur in April 2024. The rate of supply increase of STX is low compared to other layer-1 blockchains like Solana and Cardano, which is encouraging. However, the network’s total fees or token economics do not balance the inflation, which needs to change soon.

Technically, the STX/USD pair is near the top of its two-year trading range at $1.02, which is a potential yellow flag for buyers. If bulls are able to overcome this level, STX can possibly take a shot at the all-time highs near $3.00. However, given that network activity doesn’t correlate to the price rise as of yet, there’s a chance of a pullback toward $0.68 and $0.24.

STX/USD daily price chart. Source: TradingView

Similarly, the STX/BTC pair is also near its all-time range of 0.00004350 BTC, which raises the possibility of a correction once those levels are tagged. The downside targets of STX are at 0.00002744 BTC and 0.00001233 BTC.

STX/USD weekly price chart. Source: TradingView

Bitcoin NFTs have a lot of potential, but it is still unclear if the Bitcoin community, which is usually against speculation and activities that clog the network, will allow the trend to prosper.

Currently, the most crucial aspect of NFT trading — an easily accessible marketplace and wallet — is still missing from the Ordinals ecosystem. As a Bitcoin sidechain, Stacks enjoys technical advantages with Bitcoin integration and it has a slight advantage over other blockchains in providing the tools to support an Ordinals craze.

However, the applications to support Ordinals are still in development. Meanwhile, Stacks faces competition from other more liquid ecosystems, which could develop more feasible solutions to integrate Bitcoin NFTs on their chain.

The views, thoughts and opinions expressed here are the authors’ alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.

NFT marketplace tokens soar in 2023, and Blur’s recent airdrop may extend the trend

NFT marketplace tokens are gaining the market’s attention, and Blur’s recent airdrop could extend the trend.

Cumulative nonfungible token (NFT) trading volume trended higher in January, and data from a recent Delphi Digital report showed monthly volumes reaching an eight-month high above $1 billion.

The key factor that influenced NFT trading was the Blur token airdrop on Feb. 14. Since its launch last year in Q3 2022, Blur has rewarded users with “care packages,” which can be redeemed for tokens starting Feb. 14 at 12 pm ET.

Many users have tried to farm these airdrops, increasing the platform’s trading volume. Since the start of 2023, Blur’s trading volume has surpassed that of OpenSea, the market leader in the NFT trading space.

NFT Marketplace market share by 7-day volume. Source: Dune

Airdrops often create excitement in the market of thrilled users who receive free money and FOMO from those who missed out. It’s likely that the next step for the Blur team will be to launch new liquidity mining campaigns, similar to Optimism, to retain its volume and users. Moreover, users will also move on to other opportunities in the space, similar to Blur.

On-chain data shows whales are accumulating NFT tokens

The top NFT trading platforms on Ethereum with a native token are LooksRare (LOOKS) and X2Y2 (X2Y2). The year-to-date increase in the price of their tokens is 100% and 260%, respectively. The tokens have outperformed the market’s average gain, suggesting buyers are paying more attention to these tokens.

Independent on-chain analyst The Data Nerd found that Taureon Capital is accumulating NFT marketplace tokens. Ethereum wallets identified as “smart money” by Nansen have also significantly increased holdings of X2Y2 and LOOKS. It shows a rising trend among sophisticated investors toward NFT marketplace tokens.

Let’s look at each platform more closely:

X2Y2

X2Y2 ranks third concerning NFT trading volumes on Ethereum. The platform launched its token in February 2022 and has since seen steady usage. It distributes the platform’s trading fees among X2Y2 stakers and incentivizes trading through X2Y2 incentives.

The platform has a price-to-earnings (PE) ratio of around 14, which is in the lower range of other decentralized finance (DeFi) tokens whose PE ranges between 10 and 250.

Recently, 37.5 million LOOKS tokens, representing 17% of the circulating supply, were unlocked for the developing team and treasury at the start of February. The team reassured investors, claiming, “The X2Y2 team will NOT sell any token from this upcoming unlock or any tokens unlocked thus far for the foreseeable future.”

X2Y2 token release schedule. Source: X2Y2 docs

Nevertheless, the token faces risk due to inflation, which will see its circulating supply nearly double by the year’s end. The team has also placed a monthly burn mechanism to counteract the dilution.

The token is trading near its 2022 range highs of around $0.20. If buyers can break out and consolidate above this level, there is a likelihood of more gains in X2Y2.

LooksRare

LooksRare is another competitor of OpenSea that offers token stakers with the platform’s trading fees in Ether (ETH) and Wrapped Ether (wETH). The marketplace has a competitive PE ratio of 11.7, which is less than X2Y2.

On-chain analytics platform Lookonchain revealed that prominent trader and BitMEX founder Arthur Hayes owns 3.62% of the token’s total supply. Confidence among whale investors like Hayes motivates retail and other funds to follow in their footsteps.

Like X2Y2, the LOOKS token went through significant unlocks toward the end of 2022, but there are no major unlocks of the token until Q2 2023.

LOOKS token release schedule. Source: Coingecko

The price action of LOOKS suggests that the market has absorbed the recent dilution. Based on its 2022 trading levels, the token has the potential for significant upside toward $0.35 and $0.50. However, the platform must show an increase in usage to support further rallies.

Rarible

Rarible’s native token differs from LooksRare and X2Y2 in that it doesn’t share the platform’s trading yield. The RARI token only serves as a governance token used in voting on proposals in the Rari Foundation.

The team adopted Curve’s voting escrow-styled tokenomics, which hasn’t seen any real staking tracking yet. Besides that, RARI can be used to trade on the platform, but its usage as a payment token is limited compared to ETH and stablecoins.

The token’s price performance has reflected its poor tokenomics. Unless the Rari Foundation moves to enhance the token’s utility, RARI’s performance may remain subdued compared to the rest of the market.

There also could be some hidden opportunities in DeFi–NFT platforms like JPEG’d and Pine, which enable loans against NFTs as collateral.

The total NFT trading volume is less than 1% of the volume of cryptocurrency exchanges. However, it’s a growing segment that is projected to produce revenues near $5.9 billion by 2025. Thus, early investments in decentralized marketplaces that share a portion of their income may reap handsome rewards in a couple of years.

The views, thoughts and opinions expressed here are the authors’ alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.

Turn Cointelegraph articles into NFTs — Early access for 500 readers

Cointelegraph introduces its Historical NFT collection, with articles that have shaped the blockchain industry mintable as nonfungible tokens.

Turning Cointelegraph articles into digital collectibles to preserve the crypto industry’s most memorable moments is now becoming a reality. The Cointelegraph Historical collection will allow every article ever published by the largest crypto media outlet to become mintable into nonfungible tokens (NFTs).

With the help of readers, Cointelegraph seeks to create the first decentralized catalog of news that will cement the evolution of crypto onto the blockchain. The waitlist is now open, but only the first 500 readers will be able to participate in the early access that will commence at the start of November. The feature will be rolled out to everyone shortly after that, in mid-November.

Just like NBA Top Shot tokenizes memorable moments from the world of basketball, Cointelegraph’s Historical NFT collection ensures that news stories have a lasting impact. In a world where trending content is assessed by how many likes it receives, an article’s value can now be governed by the number of readers willing to collect it.

With Instagram introducing digital collectibles to its wide-ranging audience, it’s becoming more apparent that media consumption patterns are shifting. Just being able to like, share and subscribe isn’t going to cut it anymore for regular users. The next generation of media consumers will need a new way of engaging with the content they think is valuable, as was demonstrated by a Lens Protocol closed beta run, for example.

There is nothing new about collecting content you like. Remember those late Sunday afternoons spent at the kitchen table carefully cutting out magazine articles about your favorite artist? Or even carefully curating your MP3 playlist to fill up the storage on your player?

Just like any collectible, some news headlines have sentimental value; even more so, they present value for the history of humankind. That’s why some old newspapers are selling for thousands of dollars on eBay.

So, how about exclusively owning a story commemorating Bitcoin’s Taproot upgrade or El Salvador adopting BTC as legal tender? Many articles that seem like news today will become valuable artifacts tomorrow.

Speaking about the launch, Cointelegraph’s editor-in-chief, Kristina Lucrezia Cornèr, stated, “Enabling content platform to be active part of the Web3 ecosystem is key to sustainable creative economy. We at Cointelegraph are proudly bearing the responsibility of keeping high standards of coverage of the decentralized space and preserving journalistic integrity — and it’s about time our articles are treated as collectibles. I believe it will bring more appreciation to the hard and important job reporters do and help support independent journalism.”

Mintmade, the point-of-sale platform behind Cointelegraph’s Historical NFT collection, is developed by a team of nonfungible token pioneers who have been exploring the concepts of tokenized media since 2018 when they launched an NFT-powered web series.

Ivan Sokolov, founder of Mintmade, added, “We’re beyond thrilled to have teamed up with a media outlet of such caliber for this daring and innovative project. For decades, newspapers from the most significant days in history have been cherished by collectors. By allowing articles to be turned into NFTs, we’re bringing this time-honored tradition into the 21st century.”

Anyone can apply for the waitlist to start the hunt for the most valuable moments. But only the first 500 applicants will receive early access, so hurry up!

Cointelegraph increases its presence in Middle East and North Africa with a new franchise

Cointelegraph MENA will cover more news and technological developments in each country in the region in Arabic.

Cointelegraph, the premier blockchain- and crypto-focused media outlet, is increasing its presence in the Middle East and North Africa (MENA) region with the help of a new franchise owner, Luna Media Corporation.

Based in Dubai, Luna Media Corporation is a media holding group that aims to promote the Web3 industry through a variety of unrelated ventures and investments. The new franchise will be crucial to increasing the exposure of blockchain projects and activities in the MENA region to a global audience.

Founded in 2013, Cointelegraph has been at the forefront of blockchain and Web3 news, covering cryptocurrency, nonfungible tokens (NFTs), the metaverse space, decentralized finance (DeFi) and other emerging financial technology.

Elijah Leyb, vice president of global operations at Cointelegraph, oversees 10 local versions of the site in addition to the primary edition in English, including French, Spanish, German, Italian, Turkish, Chinese, Korean, Portuguese, Japanese and Arabic. Leyb said he is “looking forward to securing our position in the very promising MENA region with our new partner.”

Commenting on the new development, Cointelegraph editor-in-chief Kristina Lucrezia Cornèr stated:

“The MENA region is booming with innovative projects, including blockchain and crypto, and it is an amazing opportunity for us to grow our readership through original content produced in Arabic from within one of the most active modern hubs of the fintech community, Dubai.”

Cointelegraph MENA will provide Arabic-language news coverage of the top news and technological advances in each country in the area. The publication will have a significant impact on a market that is rapidly growing. To follow the latest news from Cointelegraph MENA, visit ar.cointelegraph.com.

The MENA region has been a hub of activity in the crypto and blockchain space in recent years. The United Arab Emirates has been leading the charge with its regulatory efforts and is home to a number of major blockchain and crypto brands.

In 2021, Morocco was the most popular Bitcoin (BTC) market in North Africa — despite the fact that it’s illegal in the country. As reported by Cointelegraph, the “Kingdom of the West,” as it’s known locally, was the runaway North African leader in Bitcoin trading in 2021, just narrowly edged out by Saudi Arabia when looking at the entire MENA region.

CryptoPunk sells for $2.6M as big NFT brands floor prices increase

Despite the massive downturn in the NFT market, CryptoPunk 4464’s $2.6 million price tag signals that top NFT projects are still managing to attract some serious attention.

Despite a major decline in trading volume across the broader nonfungible token (NFT) market, a single CryptoPunk has sold for a whopping 2,500 Ether (ETH) which equates to a price tag of just over $2.6 million.

The $2.6 million transaction makes the sale of CryptoPunk 4464 — one of just 24 ape-themed CryptoPunks — the largest NFT sale of the last 30 days across the entire market.

Punk 4464 bought for 2,500 ETH ($2,615,224.91 USD) by 0x561786 from 0x33eaae. https://t.co/xqtkT3BeER #cryptopunks #ethereum pic.twitter.com/iCAAG4LKHg

— CryptoPunks Bot (@cryptopunksbot) July 12, 2022

When looking through the lens of Ether-denominated pricing, the sale makes this particular Punk the collection’s fourth most valuable sale of all time, although the recent downward pressure on the price of ETH means that the dollar value of NFTs has suffered substantially over time. In United States dollar terms, it’s the 15th most valuable CryptoPunk sale to date.

Contrary to the bearish sentiment around NFTs, the floor prices of the top collections have actually been on the rise in recent weeks — with the floor price of the CryptoPunk project growing more than 65% in the last 30 days. Bored Ape Yacht Club (BAYC), crypto’s most popular NFT project, has seen a 21% increase in its average floor price, while companion project Mutant Ape Yacht Club saw its floor price grow by 25%.

The record sale additionally shows that despite the broader trading volume and average floor prices throughout the NFT market slumping to new yearly lows, the most popular NFT projects are still attracting serious attention.

Unfortunately for nonfungible enthusiasts, over the last three months, the NFT market capitalization suffered a drop of 32% while losing over 70% of its trading volume, according to data from NFTGo.

Meanwhile, according to DappRadar, the number of users on OpenSea — the largest NFT marketplace by volume — has fallen by nearly 9% in the past month. By the end of last month, overall NFT trading volume on the platform had fallen roughly 65% to $500 million.

While lower Ether prices have also driven down overall volume, the number of first-time NFT buyers has remained relatively consistent at around 5,000 users since March this year — suggesting that the market appeal for NFTs on the Ethereum network has been sustained.