STX, the native token of bitcoin-focused Layer 2 smart contract platform Stacks, is riding the bitcoin rally, up roughly 30% over the past seven days.
STX/USD daily chart. Fountain: x/mOhaJLhU/” rel=”null” target=”null” text=”null” title=”null”>TradingView
STX (STX) trading volume has doubled over the same period to $148.2 million as of September 26, outpacing bitcoin (btc)'s 7.5% gain since September 18.
Let's look at the factors behind STX's growing momentum.
STX price rises as Nakamoto upgrade nears
The STX price rally comes as the community prepares for the next update known as Nakamoto releasefor which there are less than 15 days left.
The Stacks Foundation officially announced that the highly anticipated Nakamoto update will go live on October 9. The core developers have selected bitcoin block number 864864 as the hard fork block.
Countdown to the launch of the Stacks Nakamoto hard fork. Source: batteries
The update is expected to improve decentralized finance (DeFi) in 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 create applications on bitcoin.
To celebrate this important milestone, the Stacks community will host more than 20 developers workshops around the world, with conferences, live demos 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 allows developers to embed sBTC into decentralized applications (DApps) on these platforms.
Source: Stacks Foundation
These integrations give bitcoin holders more opportunities to use their assets beyond simply holding or trading them, such as participating in decentralized finance or participating in nft markets.
Network Growth Boosts STX Price
All of these developments have increased user interest in Stacks and the implementation of blockchain smart contracts has reached record levels. In a September 7 post about x, the Stacks Foundation x.com/Stacks/status/1832450434285629805″ rel=”null” target=”null” text=”null” title=”null”>announced that the number of smart contracts deployed on Stacks reached an all-time high of 1,400 in August, representing a month-over-month increase of 30%.
Number of smart contracts deployed on Stacks per month. Fountain: x.com/Stacks/status/1832450434285629805″ rel=”null” target=”null” text=”null” title=”https://x.com/Stacks/status/1832450434285629805″>Pile Foundation
Additional data compiled by DeFi analytics firm DefiLlama shows that DEX trading volume on the Stacks network has increased sharply, increasing by over 31,300% from $100 on September 17 to $31,480 on September 25.
DEX trading volume. Source: DefiLlama
Another metric used to measure user interest and how much they trust a blockchain network is the total value locked (TVL) on the platform. According to data from DefiLlama, Stacks' TVL has increased by 70% from $91.1 million on September 18 to $112.5 at the time of writing.
Total value locked in batteries. Source: DefiLlama
The increase in the total value locked in Stacks indicates a significant injection of capital into the network's DeFi ecosystem, underscoring investor confidence and active participation in DApps.
Related: 'Sustained' bitcoin ETF Inflows May 'Boost' Price Despite Slowdown in Spot Purchases
bitcoin Price Uptrend Fuels STX Rally
Approval of US-based spot bitcoin ETFs and anticipation of bitcoin halving in Q1 2024 caused btc price to surge to an all-time high of $73,835 on March 14 . Similarly, STX rose to an all-time high of $3.84 in April. 1.
Recently, the 50 basis point rate cut by the US Federal Reserve and increased inflows into bitcoin ETFs have been driving a strong rally in the price of btc, which rose as high as $65,800 on September 26. STX, again, followed in bitcoin's footsteps. reaching an eight-week high of $2.07 on September 26.
STX/USD vs btc/USD daily chart. Fountain: x/FjVDNBGJ/” rel=”null” target=”null” text=”null” title=”https://www.tradingview.com/x/FjVDNBGJ/”>TradingView
With market participants expecting the bitcoin price to continue rising in Q4 2024 and Layer 2 bitcoin development to gain momentum, Stacks may further establish itself as a dominant player in the Layer 2 bitcoin sector.
This article does not contain investment advice or recommendations. Every investment and trading move involves risks, and readers should conduct their own research when making a decision.
