The Huge Cultural Opportunity in Bitcoin Ordinals

A New Medium for Creative Expression

Above: Ancient cave paintings of animals and handprints. Credit: ENRIQUE ALAEZ PEREZ/Shutterstock.

Imagine the first artist who smeared pigment on a cave wall. They didn’t have a paintbrush or palette, but they had a medium of expression, and with it, they told stories that have lasted millennia.

Think about the Bronze Age. Artists who had been chipping away at stone suddenly had a malleable, durable material. The sculptures they created were more detailed and lasted longer. It was a game-changer. Then came oil painting in the Middle Ages. Artists could blend colors in ways they never could with tempera paints. The result? A creative explosion we now call the Renaissance.

Fast forward to the 19th century. Photography comes onto the scene and turns the art world upside down. Now, capturing reality is a click away. So what do artists do? They start experimenting with how they can represent the world, leading to movements like impressionism and abstract art.

That’s the power of new artistic mediums — they’re not just tools, they’re catalysts for creativity.

And that, in essence, is the narrative of Ordinals on Bitcoin. They’re a fresh canvas in the crypto space, a new medium that invites both artistic and technical expression. They spark an exploration of untapped possibilities, fostering a cross-pollination of ideas. Concepts in the NFT sector, like art and profile pictures previously explored on other chains, are now being reimagined and taken in different directions.

The introduction of Ordinals, particularly the ability to create true digital objects, has ignited a renewed passion and excitement among creators and users alike as they engage with new audiences and interactions.

But it’s not just about novelty. Ordinals are built on a fundamentally strong network: the oldest and most recognized store-of-value blockchain today, Bitcoin. This fusion of innovation and reliability is why we’re paying attention to Ordinals.

In this report, we will:

Outline our thesis behind the potentially huge market opportunity for Ordinals, and what to look out for
Explore the data and identify trends around Ordinals activity, trading volumes, and their effect on the Bitcoin network
Present the most noteworthy developments since our last report in March
Highlight the most interesting Ordinals collections to pay attention to

Our Thesis on Ordinals & Digital Artifacts

Like many, when Ordinals first came out we thought they could just be a passing fad. Crypto narratives often have a short half-life. However, the data and recent developments point to a future where Ordinals are here to stay. We’ll explain why.

Ordinals: The Protocol Layer for Digital Artifacts

Most NFTs today on Ethereum aren’t truly “on-chain” primitives. While they may be transferred or traded on the blockchain, their metadata is stored off-chain on either a centralized AWS server or IPFS. This means that the metadata can be altered or even lost. For example, Clone X unilaterally modified the metadata of one of its NFTs to resemble LeBron James. With Art Blocks, while the JavaScript that creates the artworks is stored on-chain, there can be references to off-chain libraries as well.

Contrast this with Ordinals, which are fully on-chain and immutable, making them digital artifacts in the truest sense. In that way, they have properties more closely resembling enduring physical artifacts, like Greek sculptures. The inscriptions on Ordinals are unalterable and will exist perpetually on Bitcoin.

It is this greenspace of digital artifacts that makes Ordinals so interesting. It’s a big deal, even though most don’t realize it yet. As 0xfoobar points out, there is a permissionless premium for truly on-chain assets because people value the certainty of ownership, clear provenance, and liquidity. As collectors become more sophisticated and understand the value of something being truly on-chain, this premium is likely to increase.

Ordinals have other unique characteristics:

Native to Bitcoin: Ordinals exist on the largest store-of-value crypto network today. They lean into the large brand power of Bitcoin. Ordinals are largely denominated in BTC. The value of the denominator currency is likely to hold/grow over time — unlike tokens on other networks, which can be extremely volatile (like what happened with Solana NFTs during the FTX collapse).
Ordered numbering across the ecosystem: In other ecosystems like Ethereum, NFTs exist independently as separate collections with no order.

High-End Digital Art Will Be the First Key Market

Jeff Bezos, the founder of Amazon, once said: when predicting the future, look for things that don’t change. Creating and collecting art is one of those things. It’s a defining characteristic of the human species, and artists have always found ways to express themselves in new mediums.

It is no wonder that Ordinals have been slowly attracting a new wave of artists and art collectors. They provide artists with a new type of canvas for creative expression:

Recursive Ordinals allow generative art to flourish on Bitcoin. Building complex, digital on-chain artifacts is also possible — only limited by the artist’s imagination.
Rare sats are equivalent to painting on expensive, scarce canvases.
Immutability & permanence are powerful. Artists want their work to live forever.

The market size for Ordinals today is difficult to pin down due to their heterogeneity and illiquidity. As a rough gauge by looking at collection floor prices, it is probably less than 30% of the size of the generative art market on Ethereum today, which is estimated to be $1.8B now. By comparison, the traditional art market is estimated to be worth $1.7T.

There are two trends we believe will play out in the coming months-years:

The crypto art market will grow and narrow the gap with the traditional art market. We’ve seen the explosion of crypto art over the past 3 years, and top museums are starting to recognize and exhibit crypto art.
Ordinals will take up a larger market share of the Crypto art market compared to today, as more artists choose to create their works on them.

If you share these beliefs, it is easy to see why the opportunity is huge. Ordinals could grow to a market cap between that of Ethereum generative art and traditional art today, making them anywhere from a 4x to 1000x+ market opportunity.

What about other use cases beyond crypto art?

There are tradeoffs with Ordinals:

Lack of smart contract functionality on Bitcoin
Slow transaction speed with long block times
Lack of clear token standards (e.g., ERC-721 on Ethereum)

As for other use cases besides crypto art, we’re skeptical in the near-to-mid term.

Virtual Lands: Content and development infrastructure is years behind Ethereum.
Gaming: This would require smart contract features like staking, modification, and ab