As Cointelegraph reported, plans to launch a stablecoin pegged to Bitcoin, upcoming network upgrades, and BTC’s recent recovery may have something to do with STX’s 30% gain.
STX, the native token of the Bitcoin-focused Stacks layer-2 smart contract platform, has benefited from Bitcoin’s recovery, rising about 30% over the past seven days.
STX’s trading volume doubled over the same time frame, reaching $148.2 million as of September 26, outpacing Bitcoin’s 7.5% gain since September 18.
Let’s look at the factors behind STX’s upward momentum.
STX price rises as Nakamoto upgrade approaches
The increase in STX price is related to the community preparing for the upcoming Nakamoto Release update, which is less than 15 days away.
The Stacks Foundation has officially announced that the much-anticipated Nakamoto upgrade will be activated on October 9. The core developers have chosen Bitcoin block number 864864 as the hard fork block.
The upgrade is expected to boost decentralized finance (DeFi) on Bitcoin through improvements such as faster transactions and the introduction of a new Bitcoin-pegged token, sBTC, which will be used by Bitcoin holders and developers looking to build applications on Bitcoin.
To celebrate this major milestone, the Stacks community will host more than 20 developer workshops around the world, including lectures, live demonstrations, and technical challenges, where participants can earn STX tokens.
To this end, Solana and Aptos announced the integration of sBTC, a Bitcoin-backed asset, enabling developers to incorporate sBTC into decentralized applications (DApps) on these platforms.
These integrations provide Bitcoin holders with more opportunities to move beyond just holding or trading their assets to participate in decentralized finance or NFT markets.
Network growth drives STX price
All these developments have boosted user interest in Stacks, with smart contract deployments on the blockchain reaching an all-time high. In a September 7 post, the Stacks Foundation announced that the number of smart contracts deployed on Stacks reached 1,400 in August, a new all-time high and a 30% month-over-month increase.
Another measure of user interest and trust in a blockchain network is the total value locked (TVL) on the platform. According to DefiLlama, Stacks’ TVL has increased 70% from $91.1 million on September 18 to $112.5 million at the time of writing.
The increase in total locked value on Stacks indicates a significant infusion of capital into the network’s DeFi ecosystem, highlighting investor confidence and active participation in DApps.
STX gains driven by rising Bitcoin prices
The approval of a spot Bitcoin-based ETF in the United States and the anticipation of the Bitcoin halving in the first quarter of 2024 pushed the price of BTC to an all-time high of $73,835 on March 14. Similarly, STX also reached an all-time high of $3.84 on April 1.
Recently, the U.S. Federal Reserve’s 50 basis point rate cut and increased inflows into Bitcoin ETFs have fueled a strong rally in BTC prices, which rose to $65,800 on September 26. STX once again followed Bitcoin’s footsteps, rising to an eight-week high of $2.07 on September 26.
As market participants expect Bitcoin prices to continue to rise in the fourth quarter of 2024 and second-layer Bitcoin development gradually gains traction, Stacks may further consolidate its dominance in the second-layer Bitcoin space.
