Author: Luke, Mars Finance
From Peak to Valley: A Year of Extreme Contrasts
Recalling the spring of 2024, the Bitcoin ecosystem was like a dazzling supernova. The rise of the BRC-20 token standard and the Ordinals protocol's inscription boom ignited market frenzy. Inscriptions—an innovation of embedding unique data directly into Bitcoin's smallest unit "satoshi"—propelled on-chain activity like a rocket. Tokens like ORDI skyrocketed, with some assets doubling or even multiplying several times in value within weeks. Projects like SATS and RATS joined the carnival, bringing stunning returns. Bitcoin's on-chain transaction volume surged, gas fees skyrocketed, and miners' income soared. It was a golden moment where innovation, speculation, and passion intertwined, seemingly heralding a new era for Bitcoin—not just as digital gold, but as a vibrant decentralized finance (DeFi) platform.
However, crypto world's heat often fades quickly. By mid-2024, Bitcoin's ecosystem narrative had plummeted from heaven to hell. Tokens that once soared—ORDI, SATS, etc.—crashed over 95% from their peaks. On-chain activity sharply contracted, inscription trading volume continuously declined, and new project launches slowed to almost a standstill. Community sentiment shifted from excitement to depression. Long-awaited airdrops disappointed, and the Runes protocol—the eagerly anticipated evolution of BRC-20—quickly cooled after a brief surge. By early 2025, the Bitcoin ecosystem was no longer the market's darling, but a "reverse indicator" symbolizing unfulfilled potential and investor fatigue.
[The rest of the translation follows the same professional and accurate approach, maintaining the specified terminology translations.]Bitcoin's Layer 2 (L2) solutions are viewed as key to expanding DeFi functionality, but currently underperform. Over the past year, more than 25 L2 and sidechain projects have emerged, but most remain idle, lacking mature products and user bases. Projects like BitcoinOS and B² Network locked $110 million in DeFi assets in 2024 through zero-knowledge proof technology, but still lack competitiveness compared to Ethereum's Rollup ecosystem. If L2 solutions fail to provide compelling use cases, they may become hollow shells, further shaking market confidence.
The Road Ahead: Hope and Challenges for Revival
Can Bitcoin's ecosystem rebound into a long-term trend? The answer depends on its ability to address structural issues and fulfill long-term promises.
Product Implementation: From Vision to Reality
The ecosystem's biggest weakness is the lack of practical products. To achieve the goal of "native Bitcoin DeFi", developers need to build functional applications like decentralized exchanges, yield farming protocols, or stablecoin systems comparable to the Ethereum ecosystem. BitcoinOS's smart contract exploration and BRC-2.0's token creation simplification are potential breakthrough points. However, these projects must transition from concept to actual implementation, attracting users and capital.
Developer Revitalization
Reigniting developer enthusiasm is crucial. Bitcoin's simplicity is both an advantage and a limitation. The advancement of zero-knowledge proof and Rollup technologies shows that scalability and programmability are not mutually exclusive. Funding programs like Lightchain Protocol AI might encourage developers to return, but need to be accompanied by better tools and documentation to lower development barriers. An active developer community can not only drive innovation but also signal the ecosystem's long-term potential to the market.
Community Cohesion and Narrative Reshaping
The Bitcoin ecosystem needs a unified narrative to consolidate the community. Current competition between BRC-20 and Runes, and the fragmentation between Eastern and Western markets, have weakened its appeal. A narrative focusing on Bitcoin as a secure foundation for DeFi and real-world assets (RWA) might reignite enthusiasm. Community-driven meme activities—like Dogecoin's revival—could also help, but must be backed by substantial progress to avoid becoming hollow hype.
Seizing Market Cycles
The crypto market is driven by sentiment, and Bitcoin's ecosystem's undervaluation gives it potential for explosive growth in a bull market. Recent rebounds indicate willingness to bet on high-risk assets. If Bitcoin's price continues to rise due to institutional adoption and ETF inflows, ecosystem tokens might benefit from a "halo effect". The sustained momentum in the coming weeks will be critical in transforming skeptics into believers, depending on the market's continued dynamics.
