As market players’ interest in layer-2 Bitcoin keeps growing, Stacks (STX) emerges as a top performer.
Following a 400% increase since October 2023, STX, the native token of the Bitcoin-focused Stacks layer 1 smart contract platform, is causing a stir in the cryptocurrency market.
Over the same time frame, STX trade volume increased by an astounding 2,600%, reaching $437.6 million on February 22.
As of October 15, 2023, STX has outpaced Bitcoin with a 90% year-over-year rise in performance. Additionally, according to Messari, STX has increased by 600% in 2023 compared to Bitcoin.
This year has witnessed an increase in interest in Bitcoin layer-2 projects because to the focus on Bitcoin Ordinals, which currently have a $2.5 billion market cap, as well as spot Bitcoin ETFs, which currently have more than $10 billion in assets under management (AuM).
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Stacks is a layer 2 network for Bitcoin that is intended to facilitate the essential aspects of decentralised finance (DeFi), which are comparable to those of other layer 1 ecosystems like Solana and the Ethereum network.
With Stacks, users can create unique cryptocurrencies that resemble wrapped Bitcoin, nonfungible tokens, and Ethereum’s ERC-20 tokens and stablecoins.
Additionally, Stacks facilitates a liquid staking protocol (LSP) and a decentralised exchange (DEX).
The ability of Bitcoin layer 2s to handle more transactions strengthens the network’s value proposition and currency, which is the driving force behind the increased interest in them.
The BRC-20 token standard and Ordinals inscriptions are generally attributed with increasing network activity on the Bitcoin network.
The surge in the price of STX occurs while the community gets ready for the Nakamoto Release, an update that is anticipated to happen before the April Bitcoin halving.
Among other things, the upgrade is anticipated to speed up transactions and establish a new token that is pegged to Bitcoin (sBTC).
Developers who wish to create Bitcoin applications and Bitcoin holders who wish to take part in smart contracts will both use sBTC.
Users are now more interested in Stacks as a result of all these changes. Over the past ninety-day period, the number of daily active addresses on Stacks has risen from 961 to over 4,000, according to data from the crypto analytics firm Artemis.
“Excitement Builds as STX Prepares for Nakamoto Release: Anticipated Boost in Transactions and sBTC Adoption”
In a similar vein, everyday transactions increased throughout that time from about 8,340 to 33,000.
Total value locked (TVL) on the platform is another indicator of consumers’ interest in and level of trust in a blockchain network.
Stacks’ TVL rose by 830% from $12.35 million on October 15, 2023, to $114.87 million on February 22, according to data from DefiLlama.
The spike in TVL highlights investor confidence and DApp engagement and points to a substantial financial influx into the Stacks DeFi ecosystem.
The price of Bitcoin increased to a two-year high of $49,000 due to excitement surrounding spot Bitcoin ETFs in late 2023 and the final approval by the U.S.
Securities and Exchange Commission in January 2023. In a same vein, STX surged to $2.06, the highest level in almost two years.
The price of Bitcoin has been strongly rising recently, reaching a high of $53,000 on February 20 due to an increase in inflows into Bitcoin ETFs.
Once more following in Bitcoin’s footsteps, STX rose 85% during the previous 30 days to reach a new high of $2.90.
Stacks may further position itself as one of the leading projects in the layer 2 Bitcoin industry with traders anticipating that the price of Bitcoin will rise in 2024 and the growth of layer 2 Bitcoin gaining momentum.
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