The Case for Counterparty's Native Token XCP
I've always had a love-hate relationship with XCP, the native token for Counterparty, and I'd like to make the case that you should love-hate it too—because strong emotions can unleash animal spirits in a 24/7/365 global market like crypto. And yes, I have bags to pump.
| Key Facts | |
|---|---|
| Ticker | XCP |
| Supply | 2,590,000 |
| Issued | January 2nd, 2014 |
| All-Time High (January 2018) | |
| Market Cap | $200,000,000+ |
| Token Price | $70-80+ |
| Current (August 2025) | |
| Market Cap | $9,375,800 |
| Token Price | $3.62 |
A Brief History
The Counterparty metaprotocol was developed in late 2013 and went live on Bitcoin mainnet January 2, 2014. The first use case for Counterparty was using it to burn BTC to mint XCP through proof-of-burn, which meant that this new currency wasn't "mined" by proof-of-work but it also wasn't created "from thin air" in an ICO—it was different.
2,130 BTC was burned and those early adopters that burned BTC got XCP commensurate to their Satoshi sacrifice. No pre-mine. No insider allocations. For comparison, Ethereum would raise 31,531 BTC later that same year with a substantial pre-mine for insiders.
There's a lot of interesting things about Counterparty beyond the burn, but let's focus on this one event for now. From a value perspective—in the morality sense not the monetary sense—Counterparty had baked into it from the start fairness, freedom to transact, and volunteerism that set it down a path distinct from Ethereum.
Much of this is in retrospect because at the time of the burn Ethereum didn't exist, but the reason why Counterparty remained underground while Ethereum went mainstream traces back to two key decisions:
- Decentralizing ownership through a burn vs centralizing funds in an ICO
- Building a metaprotocol on Bitcoin where developers were hostile to new use cases vs building a separate blockchain
Not doing an ICO—which was and still is out of the ordinary—set Counterparty apart, but it also meant there were no funds to pay devs from or do marketing with or to just generally be default alive in the early days, if you think in startup terms.
And then building on Bitcoin where there were vocal opponents to the idea whether it be bitcoin devs with sidechain startups to promote, or technical axes to grind, or a sort of "keep bitcoin pure and untouched" mindset, all-altcoins-are-bad campaigns, things of that nature.
And you also need to consider how different the conditions were at that time—10x fewer active addresses compared to today, BTC had just broken $1k for the first time but was quickly crashing down to near $100 where it would stay until the Bear Whale was defeated.
It was all very new and esoteric. Counterwallet was probably one of the first web3 wallets.
But I've drifted from the topic at hand. Counterparty and XCP have different lives, in some respects, there's the protocol, the userbase, and then the token. Let's get back to the token.
XCP as a Piece of History
There are a lot of ways to evaluate XCP as an asset. But just from a historical perspective, regardless of what Counterparty didn't do in terms of going Iggy Azalea or Paris Hilton mainstream big, XCP has a position in history as the first free and fair metaprotocol asset, minted on Bitcoin. And I think that claim is unassailable.
I know it's really tired claiming firsts—the main difference with Counterparty firsts generally is that the claims are true. I'm using contemporary terminology here because we have the gift of hindsight and new information, but find me an earlier metaprotocol fair mint. I'll wait.
Now let's take ORDI, for example. Minted out in March 2023, ORDI holds a special place as the first BRC-20 token. It currently trades at $187m market cap and went as high as $1.8b. These are valuations 20-200x higher than the price of XCP today.
XCP predates ORDI by nine years.
XCP as a Cultural Artifact
Beyond being early/old, XCP has a meaningful role in the culture of web3 and cryptoart. It's not like "NFT archeology" where a group of insiders find an old smart contract that hasn't minted out or re-registers old expired domains on Namecoin.
Counterparty has been in continual usage for more than a decade.
Some of the earliest pieces of cryptoart are issued with Counterparty. And no, not "just a pointer"—some of the earliest pieces have the file contents literally onchain. I'm not even a big proponent of the files being in the computer (the token is what people want and rarely do we lose a truly valuable media file on the internet), but just to say.
Consider that to create the famous Nakomoto card and register RAREPEPE, XCP was used in those transactions. It's got the juice.
Now, what would you price that cultural contribution at? Should it be less than $10 million?
XCP as a Collectible
Let's look at it a different way. The supply of XCP is 2,590,000, not a supply chosen by roadmaps or to look good in a pie chart but just as a function of how much BTC was burned. And how much XCP has been destroyed as gas since.
That's a very small supply in crypto where it is more common to see hundreds of millions or billions in circulation. It's almost small enough to be an NFT collection.
Runestone, a pre-rune on Ordinals, had a supply of 112,400 and traded as high as $675m market cap. I think if you were to really investigate what the supply of XCP in actual circulation is, it would be somewhere in the hundreds of thousands.
Having XCP, I think, signals a certain degree of sophistication to your bitcoin asset collection. And that's priceless.
XCP as a Schelling Point
One of the things I notice with all metaprotocols is a coordination problem, whether it's NFTs or memecoins. Liquidity is built on a few main projects and then runs thin as n+1 projects launch pad into the ecosystems surrounding them.
Counterparty is no different in this respect, but I think XCP is a token that is positioned to be the prominent and obvious option for traders on Counterparty to coordinate around.
It's the native token, it has its place in history, it has a limited supply and an even smaller circulating supply, and any token traded on the Counterparty DEX would benefit from XCP price action as it is the main quote asset of trading pairs on the DEX.
XCP as a Utility Token
Many would argue this is a negative thing, but XCP is actually useful.
XCP has had consistent demand from registering asset names. It costs 0.5 XCP to register an asset name and issuing a dividend cost XCP, as well. Something like 50-100k XCP has been destroyed this way. XCP is deflationary.
And recent efforts to modernize Counterparty include plans to make it even more useful. For example, in the case of fairmints, XCP rather than BTC can be chosen as the currency used to mint an asset. This offers a potential new source of demand for XCP.
There are interesting aspects to an XCP-based fairmint like thresholds for funds raised for a token to succeed that create new dynamics. It's also being discussed by the developers how to make XCP function more like a gas than it already does.
XCP as Our Bootstraps
What's crazy to me about the XCP token is that the users of Counterparty and its proponents rarely own it and try to find ways to not use or promote it. Some of this is the punk ethos of the community. It's not cool to shill coins. It's much cooler to be pure bitcoin. Pumping bags is ghey, whatever it may be.
But when I look at Counterparty, I see a lot of great projects and people doing interesting things which would all benefit from XCP's number going up. It would plumb liquidity into the DEX, create incentives for improved infrastructure and tooling, bring in new speculators who would go beyond XCP to find new opportunities or metas.
A rise in the price of XCP would send up a smoke signal. I think $100-200m market cap, which would be 10-20x higher than the current price, would be a fair start. And in cryptoland we would call that just another Tuesday.
Let's Buy Counterparty
The case for XCP isn't just about nostalgia or technical merit—it's about recognizing an undervalued asset that's our asset. Its part of Bitcoin's history, has ongoing utility, and it represents Counterparty in the world.
While the broader crypto market chases the newest shiny objects, XCP remains a sleeping giant with fundamentals that most new projects can only dream of.
Whether you're here for the tech, the culture, or the speculation, XCP deserves a second look. And yes, I'm talking my book here—but sometimes the best trades are the ones where conviction aligns with opportunity. Myself, I have accumulated 21,000 XCP.
Here is one way to think about how much XCP to hold:
- 1 XCP "I have heard of Counterparty"
- 10 XCP "I use Counterparty regularly"
- 100 XCP "I have made a small bag using Counterparty"
- 1000 XCP "I have made a big bag using Counterparty"
- 10000 XCP "I want a high risk, high reward spot position."
Do any of these categories apply to you? Do you have XCP?