While most cryptocurrencies kicked off the week in the red, Stacks (STX), a leading Bitcoin scaling solution, bucked the trend and posted gains.
$STX, the native token of Bitcoin layer-2 project Stacks, soared over 15% in the last 24 hours, according to data from CoinGecko. The network is reportedly getting close to the launch of its Nakamoto testnet scheduled for later this month. This testnet is expected to significantly reduce block times, bringing the network’s performance to par with leading Ethereum scaling solutions.
In addition, the Bitcoin-based project completely minted out its first STX-20 in the last few hours. The inscription triggered a surge in network activity, resulting in a massive increase in transactions and temporary network congestion.
STX Surges 15%
The surge came amid the hype surrounding BRC-20 and Bitcoin Ordinals. Earlier this month saw a record hike from around $5-$7 to an average of $27.55 per transaction. The rising transaction fees were driven by the rising demand in block space, wherein people were etching non-financial data onto the Bitcoin blockchain.
The high volume of inscription messages overloaded the network, causing blocks to become full and transactions to be delayed.
Bitcoin Ordinals have been the headlines since the start of 2023. The goal is to bring more use cases to the Bitcoin network, instead of solely Bitcoin. Following the idea of Bitcoin Ordinals, the introduction of the BRC-20 tokens has sparked interest among the community members.
A number of BRC-20 tokens became big winners in recent weeks. For example, Ordinals (ORDI), the first BRC-20 token, has skyrocketed by 600% in the last 30 days.
However, the concepts have also been the subject of debates as their adoption is far from widespread, and some argue they deviate from Bitcoin’s core principles of simplicity and focus on fungibility. Moreover, scalability remains an issue as the main functionality of BRC-20 is to create memecoins.
Investors Anticipate Extended Correction
Stacks (STX), Helium (HNT), and Injective (INJ) are among today’s altcoin winners, while Astar (ASTR) skyrocketed 51.34% following its listing on Upbit.
The crypto market entered a roller-coaster weekend as Bitcoin sinks below $42,000. At the time of writing, the flagship cryptocurrency is trading at around $41,000, down 2.11% in the last 24 hours. The broader market capitalization shrank by over 2.81% in the past 24 hours, settling at $1.54 trillion at the press time.
Top altcoins, such as Ethereum (ETH), Solana (SOL), and Ripple (XRP), also bled red. Ethereum, the world’s second-largest cryptocurrency, plunged over 1.76% to fall below $2,150. Other established altcoins like Litecoin (LTC) and Ripple (XRP) also faced losses, declining by 3.53% and 4.77%, respectively. Memecoins like Dogecoin (DOGE) weren’t spared either, registering a 6.2% dip.
Analysts attribute the market downturn to a combination of factors, including concerns about regulatory uncertainties, and potential profit-taking by early investors. However, some experts suggest that some pockets of the market remain resilient amidst the broader sell-off.
With Bitcoin hovering precariously below $42,000, the question on everyone’s mind is whether the downtrend will continue to the end of the year, or this is just a temporary blip. Of course, a few years ago, Bitcoin at $40,000 would be a high price, but today people have short attention spans, and even shorter memories.
The first quarter of 2024 promises to be eventful as the U.S. Securities and Exchange Commission (SEC) will reach a verdict on the highly anticipated spot Bitcoin ETF application in that timeframe. Additionally, Ethereum’s next major upgrade, Dencun, is slated during this quarter, which potentially injects further momentum into the market.
Bitcoin halving is another important event next year. Crypto enthusiasts believe that the coming halving can be beneficial to Bitcoin in the long haul, similar to previous halving events. In all likelihood, we will see much higher crypto prices.
