Stacks (STX) Price Soars Amid Rising Layer-2 Bitcoin Interest

STX, the native token of Stacks, a smart contract platform built on Bitcoin, has experienced impressive growth in the crypto market. Since October 2023, STX has surged by 400%, outperforming Bitcoin’s 90% increase over the same period. According to crypto data provider Messari, STX has even outperformed Bitcoin in 2023 with a 600% year-on-year increase. The rise in interest in Bitcoin layer-2 projects can be attributed to the popularity of Bitcoin Exchange-Traded Funds (ETFs) and their focus on Bitcoin Ordinals, which have a $2.5 billion market cap.

Stacks is a layer-2 network designed to enable core decentralized finance (DeFi) functions similar to Ethereum and Solana. It allows users to create custom cryptocurrencies, stablecoins, wrapped Bitcoin, and non-fungible tokens. Stacks also supports a decentralized exchange (DEX) and a liquid staking protocol (LSP). Bitcoin layer-2 solutions are gaining attention because they enhance the network’s value proposition by increasing transaction processing capacity.

The recent surge in STX’s price is linked to the upcoming Nakamoto Release, which is set to take place before Bitcoin’s halving in April. This update is expected to improve transaction speed and introduce a new Bitcoin-pegged token called sBTC. The release of sBTC will enable Bitcoin holders to engage in smart contracts and developers to build applications on Bitcoin. These developments have generated greater interest in Stacks, as reflected in the increased number of daily active addresses and transactions on the network.

Another metric indicating user interest and trust in a blockchain network is the total value locked (TVL). Stacks’s TVL has skyrocketed by 830% from $12.35 million in October 2023 to $114.87 million in February 2024. This surge in TVL represents a significant influx of capital into Stacks’s DeFi ecosystem, highlighting investor confidence and active engagement with decentralized applications (DApps).

The rally in STX’s price has been driven by the upward trend of Bitcoin. The anticipation and eventual approval of spot Bitcoin ETFs by the U.S. Securities and Exchange Commission in January 2023 propelled Bitcoin’s price to a two-year high of $49,000. STX followed suit, reaching its highest price in nearly two years at $2.06. More recently, the increasing inflows into Bitcoin ETFs have further boosted Bitcoin’s price, driving STX up by 85% in the last 30 days to reach a new high of $2.90. With expectations of continued growth in Bitcoin’s price and the development of layer-2 solutions for Bitcoin, Stacks is poised to establish itself as a prominent project in the Bitcoin layer-2 sector.

Adam Lefevre

Adam Lefevre

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