Franklin Templeton, a trillion-dollar asset manager, has highlighted the impact of Bitcoin Ordinals on innovation in the crypto space in a recent note to its investors. The company’s digital assets division, Franklin Templeton Digital Assets, introduced the concept of Bitcoin-based non-fungible tokens (NFTs) and emphasized the role of the Ordinals protocol in driving positive momentum and innovation within the Bitcoin ecosystem. In the past year, there has been a renaissance in activity on Bitcoin, largely attributed to Ordinals, as well as the introduction of new fungible token standards like BRC-20 and Runes, Bitcoin-based layer-2 networks, and decentralized finance primitives.
Within the note, Franklin Templeton acknowledged the accelerating activities within the Bitcoin NFT space, noting the increasing dominance of Bitcoin within the broader NFT ecosystem. The company highlighted the surge in trading volume for Bitcoin Ordinals, which surpassed ETH in trading volume starting in December of 2023. Several Bitcoin Ordinals collections, including NodeMonkes, Runestone, Bitcoin Puppets, Ordinal Maxi Biz, and Bitmap, have begun to dominate the NFT space in terms of trading volume and market capitalization.
Despite expressing optimism about Ordinals, Franklin Templeton also cautioned investors about potential risks associated with these assets. The company warned that Ordinals may experience value depreciation and lack bank guarantees, emphasizing the importance of understanding the risks involved in digital asset investments. It was clarified that Ordinals assets are not insured by the Federal Deposit Insurance Corporation.
Franklin Templeton has been actively engaging its investors in various segments of the crypto space, including memecoins and Bitcoin ETFs. The company explored the potential of memecoins to generate quick profits but also highlighted their lack of intrinsic value. Additionally, Franklin Templeton entered the Bitcoin ETF market by launching a spot Bitcoin ETF called the Franklin Bitcoin ETF, designed for U.S. investors and mirroring the performance of Bitcoin. The company has also established Franklin Templeton Digital Assets, a dedicated group focused on research and technical development within the digital asset ecosystem.
Roger Bayston, Head of Digital Assets at Franklin Templeton, stated earlier this year that investors continue to demonstrate interest in digital assets and a desire for a simpler way to allocate to the asset class. The company aims to introduce products like EZBC, the Franklin Bitcoin ETF, to further the understanding and accessibility of digital assets within the broader investing community. Franklin Templeton recently filed for a spot Ether ETF, indicating its continued pursuit of investment opportunities in the crypto asset space. The firm’s involvement in the crypto space demonstrates its commitment to exploring and capitalizing on the potential of digital assets for its investors.
