Binance made an announcement on April 4, stating that it would halt trades and deposits involving Bitcoin Ordinals starting from April 18, 2024. Furthermore, the exchange advised holders of Bitcoin-based non-fungible tokens (NFTs) to withdraw their assets from the NFT marketplace on the platform before May 18, 2024.
Although Binance did not disclose the specific reason for suspending Bitcoin Ordinals, it mentioned a desire to “streamline product offerings” on its marketplace. Additionally, according to the announcement, the Binance NFT marketplace will cease to provide airdrops, utilities, and associated benefits for Bitcoin NFTs after April 10, 2024.
Binance Ordinals Suspension Stems from Waning Demand
Despite the setback faced by Binance, OKX has announced plans to embrace four new inscription standards, expressing confidence in the significance of Bitcoin Ordinals in 2024.
Bitcoin Ordinals, also referred to as Bitcoin NFTs, enable users to embed various digital content such as music, audio, text, video, images, or artwork onto the Bitcoin blockchain. Binance introduced support for these collectibles in 2023, promising collectors further opportunities. However, this inclusion seems to have been short-lived, surprising community members with the abrupt change of course.
The decision to discontinue support for Bitcoin Ordinals comes amidst a downturn in interest and trading activity within the broader NFT market, including Bitcoin-based NFTs, as reported by data from non-fungible.com.
According to Statista, there has been a significant decline in NFT sales, which peaked at 117,000 in August 2021 but have since plummeted to 2,400 across various blockchains, including Ethereum.
Bitcoin Network Faces Challenges from Bitcoin Ordinals
Despite the adverse impact of the drop in the global NFT market on Bitcoin Ordinals, many investors have voiced concerns regarding its effects on the security of the Bitcoin network and the congestion it induces.
Luke Dashjr, a prominent Bitcoin Core developer, revealed on December 6, 2023, that Bitcoin NFTs had triggered widespread network congestion, elevated fees, and “exposed a vulnerability” in the network.
Since its inception, there has been a significant influx of inscriptions, resulting in congestion on the Bitcoin network and escalated transaction fees, leading to user complaints about delayed transaction processing.
Data from Dune Analytics shows that the Bitcoin network has witnessed over 64.17 million inscriptions and has generated more than $430.7 million in transaction fees.
Meanwhile, the emergence of Bitcoin Ordinals has sparked a debate regarding the appropriateness of inscriptions representing NFTs and BRC-20 tokens on the Bitcoin network. It’s worth recalling that some Bitcoin developers collaborated to standardize BRC-20 tokens.
Certain experts argue that the network and its token, BTC, were originally designed for pure peer-to-peer (P2P) financial transactions and may encounter similar issues that have plagued the Ethereum chain for years, including scammy meme coins, NFT images of monkeys consuming space, and continuously rising transaction fees.
Conversely, others contend that Bitcoin Ordinals have spurred positive momentum and innovation within the network, serving as a pathway toward decentralization.
