In a “base case” scenario, Galaxy Digital’s research unit has tipped the burgeoning Bitcoin nonfungible token (NFT) market to hit a $4.5 billion market cap by March 2025.
Bitcoin NFTs, or Ordinals, have attracted significant attention since the Ordinals protocol launched in late January, enabling users to inscribe data such as images, PDFs, video and audio onto individual satoshis — each representing 0.00000001 Bitcoin.
NFT giants such as Yuga Labs have even jumped in on the hype. On Feb. 28, the $4 billion firm behind the Bored Ape Yacht Club announced a Bitcoin-based NFT project dubbed “TwelveFold” in a notable recognition of the Ordinals movement.
In a new report published on March 3, Galaxy researchers analyzed the potential growth of Bitcoin NFTs, making estimations “conservatively based on the current size of Ethereum’s NFT market” and its growth rate over the past few years.
“While there are notable differences between inscriptions and NFTs, it’s fair to say that a native on-chain ecosystem for NFTs has emerged on Bitcoin in a way that was never before possible, and its usage has been exploding.”
The report provided three market cap predictions based on the firm’s analysis, covering bear, base and bull case scenarios.
Looking at Galaxy’s baseline analysis, the report outlined that if Bitcoin NFTs can “expand to mainstream NFT culture like PFPs [Profile Pictures], memes and utility projects,” the market capitalization should increase to $4.5 billion.
The researchers also noted in a tweet that the projection of $4.5 billion is also based on the “rapid development in inscription awareness coupled with the marketplace/wallet infrastructure already out today.”
In a bear case, in which Bitcoin NFTs don’t creep into the mainstream NFT market and pry market share away from Ethereum, Galaxy estimated that Bitcoin NFTs can still reach a market cap of $1.5 billion based on the current level of interest and supporting infrastructure.
On the bullish side of things, Galaxy researchers estimate that the Bitcoin NFT market could reach around $10 billion if it provides strong competition to Ethereum NFTs while providing unique use cases.
At the time of the report, more than 250,000 Ordinals have hit the market.
Highlighting the significance and utility of Bitcoin NFTs, the researchers noted that:
“The addition of sizeable data storage with strong availability assurances opens up a variety of use cases, many of which are only beginning to be explored, including things like new types of decentralized software or Bitcoin scaling techniques. Even the NFT use case alone, though, has the potential to dramatically widen the scope of Bitcoin’s cultural impact.”