The Runes protocol, which operates on the Bitcoin network, experienced a significant drop in transactions in December 2024. The protocol’s transaction numbers fell well below the highs reached earlier in the year.
A Brief Overview of the Runes Protocol
In April 2024, the Runes protocol set a record for the highest number of transactions on the Bitcoin network. On April 23, the protocol processed over 753,000 transactions, surpassing the Ordinals protocol, BRC-20s, and even the native Bitcoin (BTC) protocol. This represented more than 81% of all transactions in the Bitcoin blockchain.
The Rise and Fall of Runes
The Runes protocol’s momentum continued into May but began to decline mid-month. However, the protocol experienced a surge in transactions throughout June before plummeting by over 88% towards the end of the month. Despite this, the protocol showed potential for longevity after recording more than 15 million transactions in its first four months.
July and August: A Mixed Bag
In July, the Runes protocol’s popularity declined further, with its share of transactions falling under 9% on average. This decrease was attributed to a waning interest in Bitcoin-based non-fungible tokens (NFTs). However, the protocol continued to generate significant fees, reaching over $160 million by August. The protocol also recorded more than 15.6 million NFT transactions during this period.
A Brief Resurgence and Decline
The Runes protocol experienced a brief resurgence in August, with Aug. 23 recording 255,000 transactions. However, the protocol’s transaction numbers dropped again in September and have struggled to reach their previous highs throughout the last quarter of 2024.
December: The Final Nail in the Coffin?
In December 2024, Runes’ transaction share in Bitcoin continued to decline. The protocol had a transaction share of less than 10% throughout the month, except for Christmas Day when it reached a high of 19.9%.
The Broader Decline of NFTs
The decline in interest in Bitcoin Runes is part of a broader trend in the NFT market. In 2024, NFTs experienced a seven-month downturn before briefly recovering in November and December. The NFT market hit its lowest point in September when monthly sales volumes for digital collectibles dropped below $300 million for the first time since 2021.
A Shift in Investor Interest
The decline of NFTs and, by extension, Bitcoin Runes, has led to a shift in investor interest. As the popularity of NFTs waxes and wanes, investors are becoming increasingly cautious about investing in this market segment.
What’s Next for Runes?
While it is difficult to predict what the future holds for the Runes protocol, one thing is certain: the decline of NFTs has had a significant impact on the protocol. As investors become more cautious and interest in NFTs wanes, it remains to be seen whether the Runes protocol can recover its previous highs.
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