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Crypto Surge 2023: Global Adoption Soars 34%, Bitcoin & Ethereum Lead

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In 2023, the global cryptocurrency landscape witnessed remarkable growth, with the number of cryptocurrency owners surging by 34% to reach a staggering 580 million by the year’s end, as reported by Crypto.com. This notable increase, up from 432 million in January, defied prevailing macroeconomic challenges such as stringent monetary policies by Western central banks, ongoing conflicts in Europe and the Middle East, and the enduring effects of the pandemic.

Crypto Boom 2023

The surge in adoption was evident in the first half of the year, notably marked by the success of the Ethereum Shanghai Upgrade in April. This upgrade not only bolstered Ethereum network activity but also contributed to a rally in Ethereum prices. The latter half of 2023 witnessed sustained growth in both Bitcoin and Ethereum adoption.

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Bitcoin, representing 51% of global cryptocurrency owners, saw a 33% increase, reaching 296 million by December. The introduction of the Bitcoin Ordinals protocol played a pivotal role in this growth, facilitating the minting of non-fungible tokens (NFTs) and fungible tokens on the Bitcoin network. Bitcoin’s exceptional performance in April and May was attributed to the momentum generated by Bitcoin Ordinals, with more than 54 million inscriptions on the network and a total inscription fee exceeding 5,473 BTC ($257 million).

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Institutional interest further fueled Bitcoin’s adoption, with significant developments in Bitcoin exchange-traded funds (ETFs). Notably, BlackRock’s Bitcoin ETF filing and other institutional heavyweights contributed to a surge in institutional adoption.

Ethereum, representing 21% of global cryptocurrency owners, experienced a 39% growth, reaching 124 million by December. The adoption growth was closely tied to the implementation of liquid staking after Ethereum’s Shanghai Upgrade, enabling the withdrawal of staked ETH after the transition to the Proof of Stake (PoS) blockchain.

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Analysis of the trends in 2023 revealed exceptionally strong monthly growth rates of 5.1% and 6.7% in April and May, respectively. The overall growth of owners for Bitcoin and Ethereum remained robust throughout the year, with prices reaching notable levels in Q4 2023—$44,000 for Bitcoin and $2,400 for Ethereum.

Despite fluctuations in market dynamics, the composition of cryptocurrency owners demonstrated stability, with Ethereum’s adoption rate increasing by 0.7% and Bitcoin witnessing a marginal decrease of 0.4% during the year. The crypto market’s resilience in the face of global challenges underscores the growing significance of digital assets in the financial landscape.

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Trump’s Mugshots Spark Frenzy on Bitcoin Ordinals

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In a bold move that merges politics with the booming world of non-fungible tokens [NFTs], former U.S. President Donald Trump has announced the launch of digital collectible cards on the Bitcoin Ordinals platform. These unique cards are set to feature Trump’s iconic mugshots, capitalizing on the growing trend of NFTs in the crypto space.

The announcement specifies that users utilizing Wrapped Ether [WETH] to acquire 100 Mugshot NFTs on the platform will receive exclusive 1/1 Trump digital collectible cards on Bitcoin Ordinals. This special offer translates to a total issuance of 200 cards for those who engage in the specified transaction. Over the past seven days, the value of the Digital Collectible Card has surged by an impressive 93%, reaching a price point of over 0.3 ETH.

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Trump’s foray into the NFT space includes the recent unveiling of his third installment, aptly named the “Mugshot NFT Edition.” Priced at $99 per digital collectible, each card holds unique value for its owner. To add an extra layer of exclusivity, the team has introduced a chance for the holders of 47 Mugshot NFT cards to win a dinner with the former president at his lavish Mar-a-Lago estate. Additionally, these fortunate winners will receive a fragment of the navy suit worn by Trump during his arrest in August—an event that marked a historic moment as the first time a former U.S. president had a mugshot taken.

Trump Opposes CBDC

Beyond the realm of NFTs, Trump has recently made headlines for his stance on central bank digital currencies [CBDCs]. During a campaign stop in New Hampshire, he vehemently expressed his opposition, pledging to prevent the creation of a CBDC if he were to be re-elected as president.

“As your president, I will never allow the creation of a central bank digital currency,” Trump declared on stage, standing alongside crypto-friendly ex-candidate Vivek Ramaswamy. Trump argued that the introduction of a CBDC would pose a serious threat to individual freedoms, as it would grant the federal government absolute control over individuals’ money.

The topic of CBDCs has gained considerable traction within Florida Governor Ron DeSantis’ office. The convergence of politics, digital collectibles, and cryptocurrency continues to reshape the landscape of political engagement and fundraising.

Ordinals Imprint ‘Historic Moment’ In Bitcoin’s DNA

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The approval of the Spot Bitcoin ETF has been permanently etched into Bitcoin’s history through the use of ordinals. This innovative technology, Ordinals, has become the medium for commemorating significant events, such as the approval of Spot Bitcoin Exchange-Traded Products. SEC Chair Gary Gensler’s statement on the approval was encoded as Inscription 54,114,539 on the Bitcoin blockchain, featuring Gensler’s photo and the date of the letter.

Hailed as a pivotal moment in the crypto world, this commemoration marked the second inscription, with the first being initiated after a deceptive incident where a fake approval tweet was posted, falsely claiming that all thirteen spot Bitcoin ETFs had been approved. The misleading tweet, attributed to the official SEC Twitter account, triggered a sharp decline in Bitcoin’s price from $47.6k to slightly above $45.5k.

The SEC clarified that the tweet was the result of unauthorized access to its official handle and that no agency member was involved in its creation. The SEC is currently collaborating with the U.S. Federal Bureau of Investigation to identify and apprehend the responsible party.

With the impending launch of the first spot crypto ETF trading, attention has refocused on Ordinals, particularly after the introduction of the Jubilee upgrade. This upgrade aims to address concerns related to cursed inscriptions that received negative numbers due to their lack of indexing and recognition by the Ordinal protocol. However, criticisms have emerged, notably from the BRC-20 creator, expressing worries about a centralized split associated with the Ordinals Upgrade.

Bitcoin Ordinals Projects

The fervor surrounding Ordinals has been further intensified by recent developments like the Node Monkes mint and the emergence of Bitcoin puppets. The excitement surrounding Bitcoin Puppets has been likened to phenomena like Beatlemania or the frenzy of a Black Friday TV sale at Walmart. Prominent figures, including Beeple, have engaged in discussions about Ordinals, prompting speculation about what significant developments may follow, with individuals eagerly anticipating the next major drop.

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Ordinals, a protocol developed by Casey Rodarmor, operates on the Bitcoin blockchain, opening the floodgates to a wave of Bitcoin-based NFTs. This breakthrough has enabled the trading of a virtually infinite number of tokens on the Bitcoin network.

Bitcoin Ordinals Record-Breaking Sale Hits 10.4 BTC

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Continuing its remarkable trajectory, Bitcoin Ordinals has achieved yet another milestone, with NFT marketplace Magic Eden witnessing the highest-ever Ordinal sale, totaling 10.4 BTC. This historic transaction involved the Honey Badger collection, a series of 10K inscriptions spanning from 8 to 1029518. The buyer, identified as the pseudonymous Twitter user “OG General,” earned accolades from Magic Eden, which publicly acknowledged the legendary acquisition.

Magic Eden, a prominent cross-chain NFT platform that incorporated BTC Ordinals in March 2023, celebrated OG General on Twitter, hailing them as a “legend.” In response, OG General provided context, highlighting that Inscription 8 was created at a time when Ordinals had minimal attention and was inscribed on January 15 at 1 sat/vB. In a subtle jab at skeptics, popular crypto researcher Zack Voell commented, “Bitcoin Inscription 8 sold for 10 BTC today. But Ordinals are dead.”

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Bitcoin Ordinals ignited considerable excitement within the community shortly after its launch in January 2023. Over eight months later, ordinal inscriptions continue to play a prominent role in the BTC network, generating fervent discussions within the cryptosphere. Detractors argue that these inscribed satoshi Ordinals utilize block space inefficiently, potentially leading to increased Bitcoin transaction fees and slower transaction times for network users.

Sotheby’s Pioneers Bitcoin Ordinals in Art

Despite a noticeable decline in sales volume, Bitcoin Ordinals remain an active force. The recent record-breaking sale has reignited interest and discussion surrounding this unique protocol. Advocates of BTC Ordinals are particularly intrigued by its potential to expand Bitcoin’s utility beyond traditional financial transactions.

In a groundbreaking move, Sotheby’s Digital Art Department has entered the spotlight by announcing the inaugural auction featuring BTC Ordinals art. Crafted by the mysterious artist Shroomtoshi, operating under the pseudonym BitcoinShrooms, this distinctive collection is poised to captivate both enthusiasts and collectors.

As reported by TronWeekly, the featured artwork, depicting two distinct mushrooms and a pixelated avocado seed, is anticipated to command a significant price ranging from $20,000 to $30,000, marking a momentous venture into the intersection of cryptocurrency and the art world.

Bitcoin Ordinals First-Ever Auction Debuts

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Sotheby’s Digital Art Department is making waves in the art world with its groundbreaking announcement of the first-ever auction featuring Bitcoin Ordinals art. This unique collection, a creation of the enigmatic artist known as Shroomtoshi under the moniker BitcoinShrooms, is set to captivate enthusiasts and collectors alike. The featured piece, a composition showcasing two distinct mushrooms and a pixelated avocado seed, is poised to fetch a notable sum of $20,000 to $30,000. Adding a contemporary twist, the auction will accept bids in cryptocurrency, aligning seamlessly with the theme of the digital art on display.

Scheduled for this December between 6 and 13, the online sale by Sotheby’s in New York marks the debut of select works from the highly anticipated Bitcoin Ordinals project. The rest of the collection, shrouded in secrecy, has not yet been unveiled, heightening the anticipation surrounding this exclusive event.

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Shroomtoshi, the mastermind behind BitcoinShrooms, operates with an air of mystery akin to Satoshi Nakamoto. Shroomtoshi aims to advocate for values such as freedom and self-sovereignty, aspiring to educate and inspire appreciation for the cultural and technological revolution brought about by BTC.

Meanwhile, the Bitcoin community was recently rocked by a surprising turn of events. BTC Core developer Luke Dashjr raised concerns about the ‘Inscriptions’ within the Ordinals project. Dashjr pointed out that these inscriptions exploit a vulnerability in Bitcoin Core, leading to network congestion through blockchain spam.

If not addressed before the release of version v27 next year, Ordinals and BRC-20 may face elimination. Users and miners, reliant on Ordinals and BRC-20, criticized developers for this decision, triggering an immediate 15% drop in the price of ORDI within an hour.

Bitcoin Ordinals Fate Hungs In Balance

Dashjr acknowledged the recent fix for this bug in BTC Knots v25.1, attributing the delay to disruptions in his workflow. However, with Bitcoin Core still vulnerable in the upcoming v26 release, the community anticipates a solution before the v27 release, especially considering the over 250,000 pending transactions contributing to current network congestion.

The decision to potentially terminate Ordinals and BRC-20 drew criticism from the crypto community, particularly regarding concerns about miners losing income. The introduction of Bitcoin Ordinals and BRC-20 initially resulted in increased profits for miners, making the proposed elimination a contentious topic within the cryptocurrency ecosystem. As developments unfold, the crypto community awaits further clarity on the fate of Ordinals and BRC-20.

Bitcoin’s Inscriptions: Pioneering Block Fillers Or Precarious Miners’ Delight?

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Despite concerns that Bitcoin Ordinals are clogging the network, there is little evidence to suggest inscriptions are taking blockspace away from higher-value Bitcoin monetary transfers. On September 25, on-chain analytics firm Glassnode released “The Week On-chain” report, explaining minimal evidence of inscriptions displacing monetary transfers.

The Rise Of Inscriptions In Bitcoin

Since their introduction in February 2023, inscriptions have been a significant consumer of Bitcoin blockspace. Inscriptions can be considered a ‘packing filler,’ filling up any remaining space in blocks after higher-value monetary transfers are included. 

While fees and volume analysis typically consider the BTC volume being transferred and held, it’s essential to note that inscriptions may have a higher perceived ‘value’ beyond just their volume.

Despite the increase in fee revenue for miners due to inscriptions, the upcoming halving event may put significant income stress on miners unless Bitcoin prices substantially increase.

Introducing inscriptions in February 2023 marked a turning point in on-chain activity, mempool dynamics, and miner revenues. The mempool, a cloud of unconfirmed transactions awaiting inclusion in blocks, has experienced a surge in demand since February, coinciding with the release of Ordinals and Inscriptions.

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The rise in text-based inscriptions, particularly due to the emergence of the BRC-20 token, has significantly contributed to the increased demand for blockspace. Inscriptions leverage the SegWit split data structure to fit more transactions into blocks, resulting in a daily confirmed transaction count exceeding 550,000.

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Text-based inscriptions now make up a substantial portion of all transactions, accounting for 40% to 60% since May, surpassing image-based inscriptions. This surge has also led to a rapid expansion of the Unspent Transaction Output (UTXO) set.

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While inscriptions have a significant presence in block space, they tend to pay relatively lower fees per byte, making them sensitive to absolute fee levels. They are readily displaced by more urgent monetary transfers, which pay higher fees.

The dominance of inscriptions has led to a collapse in the median transfer volume, with smaller investors and inscription users transferring smaller amounts. This trend has also resulted in higher fee rates relative to transaction value.

While miners’ revenues have been boosted due to increased block space demand, the competition among miners has also grown substantially. Hashrates have increased by 50% since February, putting downward pressure on the hash price, the BTC or USD reward earned per Exahash. Miners are facing increased income stress, with profitability at risk, especially with the impending halving event.

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