Bitcoin surpasses 65 million Ordinals inscriptions days before halving

The Bitcoin network has surpassed 65 million Ordinals inscriptions just days before the much-anticipated Bitcoin halving.

Ordinals inscriptions surpassed the 65 million mark on April 11, less than one year and three months since their launch in January 2023, according to Dune data.

Ordinals Inscriptions chart. Source: Dune

Ordinals are the first iteration of nonfungible tokens (NFTs) on Bitcoin, the world’s first blockchain network. Ordinals live solely on the Bitcoin blockchain, unlike most of today’s popular NFT collections that host their metadata on centralized servers, creating additional points of vulnerability.

The milestone comes just before the Bitcoin halving, which will happen on or around April 19, reducing block rewards from 6.25 Bitcoin (BTC $70,573) to 3.125 BTC.

To date, Ordinals have generated over $458 million worth of network fees for Bitcoin miners, according to Dune, which is a significant lifeline for mining firms as the halving approaches.

Ordinals signal demand for BTCFi

The 65 million milestone shows the increased demand for block space on Bitcoin and the need for additional Bitcoin layer-2  networks, according to Mithil Thakore, CEO of Velar, who told Cointelegraph:

As ordinals become more prevalent, the need for utility around them through lending, derivatives markets, becomes evident. This trend will likely drive the rise of Bitcoin L2s, offering the programmability needed to support smart contracts to bring these ordinals as well as BTC to DeFi [decentralized finance]. It’s an exciting time for the Bitcoin ecosystem as we witness its evolution and expansion into new realms of functionality.

BTCFi, short for Bitcoin decentralized finance, is a new paradigm aiming to bring DeFi capabilities to the Bitcoin network.

Provided that the current adoption rate continues, BTCFi could match the innovation of Ethereum-based DeFi in the future, Nash Lee, co-founder of MerlinSwap, who told Cointelegraph:

[Market appetite] is seeking expansive platforms capable of accommodating the surging volumes and expectations. DeFi stands out as the only sector with the potential to leverage this narrative, providing a sustainable ecosystem for Bitcoin’s evolving use cases. This dynamic sets the stage for Bitcoin DeFi to potentially match, if not exceed, the innovation and complexity seen in Ethereum’s DeFi ecosystem.