Reported by Cointelegraph: Plans to launch a Bitcoin-pegged stablecoin, an upcoming network upgrade and BTC’s recent recovery could be connected to STX’s 30% rally.
STX, the native token of the Bitcoin-focused Stacks layer-2 smart contract platform, is riding on Bitcoin’s recovery, up approximately 30% over the last seven days.
STX trading volume has doubled over the same period to $148.2 million on Sept. 26, surpassing Bitcoin’s 7.5% increase since Sept. 18.
Let’s look at the factors behind STX’s rising momentum.
STX price rallied as the Nakamoto upgrade approaches
The STX price rally comes as the community prepares for the upcoming update known as the Nakamoto Release, which is less than 15 days away.
The Stacks Foundation officially announced that the highly anticipated Nakamoto Upgrade will be activated on Oct. 9. The core developers have selected Bitcoin block number 864864 as the hard fork block.
The upgrade is expected to improve decentralized finance (DeFi) on Bitcoin by speeding up transactions and introducing a new Bitcoin-pegged token, sBTC, among other improvements. SBTC will be used by Bitcoin holders who want to participate in smart contracts and developers who want to build applications on Bitcoin.
To celebrate this major milestone, the Stacks community will host more than 20 developer workshops across the world, featuring lectures, live demonstrations and technical challenges where participants can earn STX tokens.
In preparation for this, Solana and Aptos announced the integration of a Bitcoin-backed asset, sBTC, which enables developers to incorporate sBTC into decentralized applications (DApps) on these platforms.
These integrations provide Bitcoin holders with more opportunities to use their assets beyond just holding or trading, such as engaging in decentralized finance or participating in NFT marketplaces.
Network growth boosts STX price
All these developments have increased user interest in Stacks with the blockchain’s smart contract deployment hitting record highs. In a Sept. 7 post on X, the Stacks Foundation announced that the number of smart contracts deployed on Stacks reached an all-time high of 1,400 in August, representing a 30% month-over-month increase.
These integrations provide Bitcoin holders with more opportunities to use their assets beyond just holding or trading, such as engaging in decentralized finance or participating in NFT marketplaces.
Network growth boosts STX price
All these developments have increased user interest in Stacks with the blockchain’s smart contract deployment hitting record highs. In a Sept. 7 post on X, the Stacks Foundation announced that the number of smart contracts deployed on Stacks reached an all-time high of 1,400 in August, representing a 30% month-over-month increase.
Another metric used to measure the interest of users in and how much they trust a blockchain network is the total value locked (TVL) on the platform. According to data fom DefiLlama, Stacks’ TVL has increased by 70% from $91.1 million on Sept. 18 to $112.5 at the time of writing.
The increase in the total value locked on Stacks indicates a significant capital infusion into the network’s DeFi ecosystem, underscoring investor confidence and active participation in DApps.
Bitcoin price uptrend drives the uptick in STX
The approval of US-based spot Bitcoin ETFs and the anticipation of Bitcoin halving in the first quarter of 2024 saw BTC's price rise to an all-time high of $73,835 on March 14. Similarly, STX rose to hit a record high of $3.84 on April 1.
Recently, the 50 basis point rate cut by the US Federal Reserve and increasing inflows into Bitcoin ETFs have been driving a strong rally in the BTC price, which rose as high as $65,800 on Sept. 26. STX, again, followed in Bitcoin’s footsteps, rising to an eight-week high of $2.07 on Sept. 26.
With market participants expecting Bitcoin price to continue rising in Q4/2024 and the layer 2 Bitcoin development gaining traction, Stacks may further establish itself as a dominant player in the layer 2 Bitcoin sector.
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