Bitcoin (BTC 4.33%) has long been seen as a rigid and limited blockchain, but it is now undergoing a remarkable resurgence. This is largely due to the rising popularity of Ordinals, also known as Bitcoin non-fungible tokens (NFTs), which open up a wealth of innovative possibilities on the Bitcoin network.
However, another blockchain is set to take advantage of the renewed interest in the original cryptocurrency. Stacks (STX 13.90%), a Layer-2 solution for Bitcoin, is designed to tackle the common issues with smart contracts and scalability that have led NFTs and decentralized finance (DeFi) applications to other blockchains.
The advantages of Bitcoin are hard to ignore. It offers high security, robust decentralization, and a robust history. With Stacks, Bitcoin’s true potential as a superior form of money is unlocked, allowing it to be used in new ways.
Stacks adds smart contract functionality and scalability mechanisms to Bitcoin, creating the potential for billions of dollars in capital to be released to participate in DeFi, stablecoins, NFTs, payment solutions, and more, while still preserving the security and decentralization of Bitcoin’s blockchain.
The current DeFi economy is worth around $42 billion, with stablecoins and NFTs adding a combined value of over $131 billion. This means that Bitcoin has access to a market worth more than $170 billion that it has yet to tap into.
An example of the potential of Stacks is Wrapped Bitcoin (WBTC 4.36%). This is a tokenized version of Bitcoin that exists on the Ethereum blockchain, allowing Bitcoin holders to participate in DeFi activities and use Bitcoin in the Ethereum ecosystem. To do this, users have to deposit their Bitcoin with a custodian, who then issues the corresponding WBTC tokens. This requires the users to trust the custodian to properly manage the Bitcoin and ensure the tokenization process is accurate.
Stacks has the potential to surpass Wrapped Bitcoin because it offers direct interaction with the Bitcoin blockchain without the need for custodians. WBTC has a market cap of $4 billion, making it the 15th-highest cryptocurrency. If Stacks reaches similar levels of adoption, its token price would need to increase by 400% to $2.75.
When the previous bull market was at its peak, WBTC had a market cap of more than $15 billion. If Stacks is able to become the go-to platform for Bitcoin-DeFi, it could reach similar levels. This would require its token price to increase by more than 1,800% to $10.
Stacks offers a unique solution to combine Bitcoin’s core attributes with new use cases, and it is difficult to assign a value to it. If Stacks reaches the same level of use as its counterparts, it could become a multibillion-dollar cryptocurrency, providing investors with incredible growth opportunities.
