According to Galaxy’s baseline estimate, if Bitcoin NFTs can grow to mainstream NFT cultures such as PFPs (Profile Pictures), memes, and utility projects, the market valuation should reach $4.5 billion.
Based on the firm’s investigation, the report gave three distinct market cap estimates, spanning a bear case, base case, and bull case scenario.
In the worst-case scenario, where Bitcoin NFTs do not penetrate the mainstream NFT industry and steal market share from Ethereum, Galaxy estimates that Bitcoin NFTs can still achieve a market valuation of $1.5 billion based on existing demand and supporting infrastructure.
Concerns regarding the adverse implications of Bitcoin’s fungibility are similarly overstated, according to the paper. Even if 500 million inscriptions were linked to ordinals, just 0.2% of Bitcoin’s final quantity would become “non-fungible.”
“Our base case scenario finds that it would take 238 years to mint 500m inscriptions, or 5 BTC worth of inscriptions. Because currently ORD uses approximately 10,000 sats per inscription (1 ordinal + 9999 sats added as “postage” to help fund future transaction fees) for transferrin the ordinal), under this scenario it’s reasonable to suggest that actually 50,000 BTC see a reduction in fungibility, still only 0.24% of total BTC terminal supply (21m).”
Yuga Labs also said on February 28 that it intends to produce an NFT collection based on the Bitcoin-based Ordinals protocol, which has gained in popularity since its inception last month. The collection, dubbed TwelveFold, will have 300 generative art NFTs made by Yuga Labs and set on a 12×12 grid, which acts as a visual analogy for data mapping on the Bitcoin blockchain. Yuga Labs stated that it would have 3D components as well as hand-drawn aspects.