Galaxy Digital: Could Bitcoin be the next $5 billion market?
Article source: Encryption KOL xiyu
On March 7, Galaxy Digital's research division released a research report that says the year 2025 will be based on inscriptions and ordinalsThe Bitcoin NFT market will reach $4.5 billion.The report notes that the rapid rollout of the inscription combined with the marketplace/wallet infrastructure already in place today are key factors in predicting that Bitcoin NFT will reach a market cap of $4.5 billion within two years. The report also mentions that based on historical transaction volume data from Ethereum and Solana NFT,The cumulative trading volume of bitcoin NFT will exceed $1 billion in the next two years.
加密KOL xiyu 对 Galaxy Digital 关于比特币 NFT 和 Ordinals 的报告进行深入解读，BlockBeats将内容整理如下。
Key points
Bitcoin inscriptions will be a big market. Galaxy estimates the base case for a bitcoin NFT market size based on inscriptions and ordinals at $4.5 billion by 2025, which is a lot of room for zero compared to the current market size.
Bitcoin's prospects are much broader, and even looking at Bitcoin nft alone has the potential to greatly expand Bitcoin's cultural reach. There are also new technologies being explored, including new types of distributed software or bitcoin extensions.
The new narrative of bitcoin, driving the use of Bitcoin. The growth of inscription, whether as an NFT market or something else, will increase the likelihood of additional adoption of bitcoin, which can support BTCUSD in the long run.
The Inscriptions can be large even if they do not use the ordinal theory. Significant uses can be found on Bitcoins without relying on a second layer method to mark each bitcoin unit individually. Fears about Bitcoin's fungibility are overblown. Even of the 500 million records associated with Ordinal Numbers, only 0.2% of the Bitcoin terminal supply becomes irreplaceable.
Inscriptions can put a floor under block space requirements, benefiting the Bitcoin security and fee market. Miners would see an increase in fee income from inscriptions, helping to shift miners' income from lump sums to transaction fees. Contrary to community concerns, it is equivalent to a minimum security for miners.
Significant market infrastructure to support Bitcoin NFT will be developed in 2Q2023. Time is running out for developers to scramble.
Market valuation
2.1 Method
Using the development history and market value of Ethereum, the bear market, benchmark market and bull market valuation of bitcoin NFT market value are derived.
The report ruled out the use of Bitcoin nft in the original universe, as the metaverse is not suitable for Bitcoin.
The authors also consider the difference in market value caused by floor price and rare nft.
The authors list five different categories of NFT, which are: profile picture projects, generative art, metaverse items, Utility NFT, Others: This category includes projects that do not fall into any of these categories. Collectibles in this category include rare 1/1 collectibles by artists like Beeple, charitable projects like VeeFriends, and historical collectibles like Jack Dorsey's first tweet.
2.2 Market Conclusion:
galaxy calculated the market value of one bitcoin nft by estimating different applications in different market conditions.
1. Under the bear market condition, it is estimated that the total market value of the Inscriptions can reach $1.5 billion, which only accounts for 13% of the total market value of the current ethereum NFT.
2. Normally, if the Inscriptions expand into mainstream NFT culture, the market value of the Inscriptions will increase to 4.5 billion USD.
3. The total market address of the Inscriptions was further expanded to $10 billion by expanding the base case ($4.5 billion) by 33% and adding new categories such as real world assets in the bull case.
Speed of development
The report predicts that bitcoin nft will grow faster than Ethereum because Bitcoin users and infrastructure are mature.
Based on the historical growth rate of the Ethereum NFT market, the authors predict that the Bitcoin NFT market will reach a market cap of $4.5 billion within two years.
Bitcoin nft trading volume
4.1 Prediction Method
The authors refer to OpenSea's historical transaction volume data since its inception, and it is clear that the broader field of NFT is better suited to accepting the new type of NFT.
Given the current market optimism about NFT, historical transaction volume data from Ethereum and Solana suggest that Bitcoin NFT will reach a cumulative market cap of $4.5 billion and transaction volume of $1.6 billion over the next two years.
If Bitcoin NFT could capture a combined 1%-2% of Ethereum NFT plus global art, the ecosystem would only need to generate $822 million to $1.65 billion in transactions.
4.2 Various factors affecting Bitcoin trading volume
There may be opposition from the bitcoin community to the use of NFT on the Bitcoin blockchain, which could limit market share. If the NFT market does not continue to grow, demand for Bitcoin's native NFT will also be limited.
If the cryptocurrency market returns to a bull market, it will increase the adoption rate of NFT, which could lead to increased demand and value in the bitcoin NFT market. The emergence of entirely new NFT use cases will further drive market growth.
The bitcoin community's opposition to ordinals
The authors suggest that the emergence of the inscription phenomenon could lead to more divisions in the Bitcoin community, making it difficult for the community to reach a consensus on BIP.
If people had known in advance that Taproot might trigger events such as inscriptions, it could have led to Taproot being rejected.
This may lead to more careful review and review of future BIPs, resulting in slower activation of BIPs. Such careful review is necessary because future BIPs may be hiding unexpected problems.
Future BIPs may be more focused on addressing specific Bitcoin user use cases and minimizing risk.
summarize
1. Bitcoin will develop a new layer of culture. The Bitcoin nft is a new narrative for bitcoin and a challenge to established ideas.
2. The inscription will be home to a high-value collection. Ethereum is still the dominant nft, but the high value can belong to the Bitcoin chain.
3. More nft studios are coming. -- It seems inevitable now.
4. The emergence of exchanges such as openordex may disappoint venture capitalists because it is a fragmented, distrusted trade. For many service providers there may be no cash opportunity.
5. Royalties are out of the question. Because smart contracts are lacking.
6. Blue chip nft standard is dynamic, numbering + cherishing + project rarity
7. Although the casting is expensive, but the transaction is cheap, may cause more trading volume.
8. In the second quarter of this year, the basic tools will be developed completely, that is, the previous said smooth channel, smooth transaction.
9. Bitcoin layer 2 network is also important, some inscription activities may be transferred to layer 2.
10. 比特币稳定币也会更大规模的采用，这让我想起了 omni 的 usdt 11. 代币化不一定会采用铭文的形式。这一点我认为还是要看有没有基础配套工具。铭文=代币也是不错的一个途径。Check out Galaxy Digital's research report
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