48 The Surge In Inscriptions Signaled A Role For The Bitcoin Network Beyond Transaction Settlement 3 Launched in January 2023, Bitcoin Inscriptions Bitcoin Inscriptions introduced a unique numbering system for each Audio, Image, Video, Other Text/BRC-20 satoshi, the smallest unit of bitcoin, based on its 60 position in the blockchain. Each satoshi is identifiable and immutable, allowing users to ) 50 3 inscribe their data, images, or text. ns 2 io 0 l 2 il 40 (M N I ns N Unlike other blockchains that require smart io OI t C ip 30 T 1 cr BI contracts for NFTs, Bitcoin Inscriptions are on the Ins base layer of the Bitcoin blockchain. e iv 20 at l u m 2 u Ordinals have sparked debate about the impact of C 10 Inscriptions on transaction sizes and block space. In our view, Ordinals are a product of the free market 0 and represent healthy innovation on Bitcoin. Jan-23 Apr-23 Jul-23 Oct-23 [1] Short for Non-Fungible Token, it is tokenized metadata via unique identification codes recorded on a blockchain. [2] Refers to the creation of non-fungible tokens (NFTs) in the Bitcoin network by making Inscriptions, where metadata such as images or videos are attached to individual satoshis (the smallest unit of account). [3] BRC-20: A token standard that enables the minting and transaction of fungible tokens via the Ordinals protocol on the Bitcoin network. Sources: ARK Investment Management LLC, 2024, based on data from Glassnode as of December 31, 2023. For informational purposes only and should not be considered investment advice or a recommendation to buy, sell, or hold any particular security or cryptocurrency. Past performance is not indicative of future results.