Wintermute sees positive prospects for Bitcoin ecosystem post-halving

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With just over a week until the fourth Bitcoin halving, Bitcoin is at an all-time high, having reached a peak of $73,000 just last month and reaching a consistent $70,000 weekly closing price, according to Wintermute’s latest OTC desk market update. At the same time, open interest (OI) has soared by almost 104% to $39.4 billion.

This, the firm says, indicates greater institutional adoption within the centers of traditional finance (TradFi). Notably, in an interview with crypto news platform Coindesk, Wintermute’s OTC indicated that the halving could actually cause significant price action on related tokens such as $RUNE, $STX, and $ORDI.

$RUNE and $STX are the two most consistent tokens in the BTC ecosystem, indicating growing interest in the Bitcoin ecosystem, especially as a potential rival to Ethereum’s dynamism. Wintermute also notes the potential of this “untapped pool” with Bartosz Lipinski of Cube.Exchange saying that the high costs and congestion associated with Ethereum will “cause it to take a backseat” while Bitcoin-based projects, like Rune, will redirect investor interest to the Bitcoin ecosystem, given its novelty.

Lipinski claims that the upcoming Runes protocol (to be introduced after the halving event) could potentially overtake Ethereum L2/L1 projects like Base or Solana in terms of efficient meme coin creation.

Developed by Casey Rodarmor, the Runes protocol aims to enhance Bitcoin’s functionality while minimizing its on-chain footprint. Runes allow for the issuance of various types of fungible tokens, such as security tokens, stablecoins, and governance tokens, on the Bitcoin network, potentially expanding Bitcoin’s utility and attracting more users due to near-instant and low-cost transactions.

This protocol is open, and some projects are already building over it, riding on the anticipation of its launch coinciding with the halving. One such instance is RSIC, an Ordinals-based project that’s planning to release RUNE. Runestone, another project in the same space, has also distributed Runestone Ordinals to holders of existing Ordinals inscriptions.

Based on Wintermute’s recent analysis, it appears that the Bitcoin halving might play out differently; with the expected price surge to come earlier than usual due to ETF inflows bringing in new investors, as reported by Wintermute and by trading firm 21Shares.

Bitcoin ETFs had surged in popularity upon their launch and has even led TradFi players to offer BTC investment options. On the other hand, ETH spot ETFs remain in the doldrums, what with the U.S. Securities and Exchange Commission.

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