Bitcoin Layer-2 Crypto Coins Begin Gaining Momentum Following Halving
Bitcoin prices have remained relatively stable post-Halving, but it's now the time for Bitcoin Layer-2 projects like STX, SAVM, MERL, etc., to accelerate.
Bitcoin Layer-2 Crypto Coins Begin Gaining Momentum Following Halving
Bitcoin's once-every-four-years Halving event concluded on April 20, halving the block reward from 6.25 BTC to 3.125 BTC. Contrary to predictions of a significant drop in miner income, miners are profiting from BTC transaction fees amid the Runes frenzy.
Alongside miners, cryptocurrencies within the Bitcoin Layer-2 ecosystem are also benefiting from this event.
As explained by Coin68, alongside the rise of Inscriptions, NFT Collections, BRC20, BRC721, ARC20, and most recently, Runes, the community is realizing the urgent need to expand the Bitcoin network.
Similar to Ethereum, one of the methods being pursued is the development of Layer-2 solutions to alleviate transaction load on the main chain.
Moreover, Layer-2 is just the beginning of a comprehensive DeFi ecosystem on Bitcoin. Various solutions are emerging and evolving daily, including Stablecoins, Dex, Staking, SaaS, Metaverse, etc.
Prominent Projects in the Bitcoin Ecosystem
Most Layer-2 projects for BTC have yet to release tokens, with only a few exceptions such as Stacks (STX), Elastos (ELA), SatoshiVM (SAVM), and most recently, Merlin Chain (MERL) with its TGE.
According to data from CoinGecko, STX currently holds the highest market capitalization among Bitcoin L2 tokens at $4.2 billion USD. The price of STX is hovering around $2.9 USD, marking an approximately 3% increase in the last 24 hours.
1H chart of STX/USDT pair on Binance at 02:30 PM on April 22, 2024
Meanwhile, ELA and SAVM have recorded 24-hour gains of 12% and 9%, respectively.
Price performance of Bitcoin Layer-2 coins on CoinGecko at 02:30 PM on April 22, 2024
While these gains might not be striking against the current market backdrop, they are optimistic compared to Bitcoin's almost 1% sideways movement.
1H chart of BTC/USDT pair on Binance at 02:30 PM on April 22, 2024
Overall, Bitcoin's DeFi ecosystem is still in its infancy, with many projects in fundraising stages and early development phases. However, given the high potential ratings, this sector has ample room for further growth.
For users, participation in testnets and incentive programs of promising projects like Babylon, Velar, etc., allows for "farm airdrop" experiences. Additionally, observing projects receiving investments from major VC funds like BounceBit, BOB, ALEX, etc., is worthwhile.
