Stacks (STX) Surges 10% Due To Bitcoin Network Congestion

Jake Simmons

1 year ago

2 mins read

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While the Bitcoin and crypto markets are deep in the red, one altcoin stands out today, posting a double-digit price increase: Stacks (STX). Along with the Lightning Network, the project is considered the most promising layer-2 technology for Bitcoin at the moment and is currently benefiting from the network congestion dilemma.

There are currently over 425,000 unconfirmed transactions in the meme pool. Before being added to the Bitcoin blockchain, transactions are sent to the network’s meme pool, where they wait to be selected by a Bitcoin miner and inserted into the next Bitcoin block. At medium priority, a transaction currently costs an average of $19.04.

The Case For Stacks

The congestion is causing a heated debate: While one side calls it a DDoS attack on Bitcoin, the opposing side is calling the reason for the high fees, Bitcoin ordinals and BRC 20 tokens, a revolution. But no matter which side one takes, one thing becomes obvious. Layer-2 technologies are absolutely necessary and could emerge as a big winner.

Revolution or DDoS?

🚀Market cap of BRC20 based #Bitcoin tokens reaches $1 billion.

⌛️Sh*tcoins are extremely congesting the network. There are still 425,000 unprocessed transactions piled up in the meme pool.

— Jake Simmons (@realJakeSimmons) May 8, 2023

However, if the BTC price alone is to be the leading indicator, the current dilemma surrounding BRC20 tokens on the Bitcoin blockchain is not really doing the network any good. Binance hasn’t really done the market any favors either with the multiple withdrawal halts.

But in the long run, higher fees are needed for the BTC network to replace the falling block reward. Co-inventor of Stacks, Muneeb Ali, therefore wrote today on Twitter that high fees are not an attack on Bitcoin, as they will be the norm when Bitcoin grows to a billion people. Rather, Ali says they are a wake-up call to developers to improve and grow Bitcoin L2s.

Bitcoin fees just hit a new record. Up 500x from just a few months ago. Officially marks the start of the arms race to build the best Bitcoin L2s. Lightning, Stacks, and Rootstock have a head start. Time to build.

Bitcoin expert Will Clemente also made the case for L2 today:

If we are in a new regime of higher Bitcoin tx fees due to ordinals/brc-20s, think there’s a very compelling setup for the lightning network over the next few years.

STX Rises 10%

During the first days of May, the Stacks price has broken a downtrend that has lasted since March 20 (black line). Thanks to today’s 10% rise, the STX price now faces the 23.6% Fibonacci level at $0.82. At the price level, stronger resistance from the bears can be expected. Since April 19, STX has not managed to regain the mark.

If this succeeds, a rally to the region of $0.92, where the 38.2% Fibonacci is located, seems possible. Afterwards, the way to the psychologically important mark of $1 would be clear (50% Fibonacci). If the bulls also break through this level, $1.07 (61.8% Fibonacci) and $1.18 (78.6% Fibonacci) would be the next targets.

Stacks STX price — STX price, 4-hour chart l STXUSD on Tradingview.com

Featured image from xVerse wallet, chart from TradingView.com

Jake Simmons

Jake Simmons, a dedicated crypto journalist, has been passionate about Bitcoin since 2016 when he first learned about it. Through his extensive work with NewsBTC.com and Bitcoinist.com, Jake has become a trusted voice in the crypto community, guiding newcomers and seasoned enthusiasts alike towards a deeper understanding of this dynamic field.

His mission is simple yet profound: to demystify Bitcoin and cryptocurrencies and make them accessible to everyone.
With a professional career in the Bitcoin and crypto scene that began right after graduating with a degree in Information Systems in 2017, Jake has immersed himself in the industry. Jake joined the NewsBTC Group in late 2022. His educational background provides him with the technical prowess and analytical skills necessary to dissect complex topics and present them in an understandable format. Whether you are a casual reader curious about Bitcoin or an investor seeking to navigate the latest market trends, Jake’s insights offer valuable perspectives that bridge the gap between complex technology and everyday usage.

Jake is not just a reporter on technological trends; he is a firm believer in the transformative potential of Bitcoin over traditional fiat currencies. To him, the current financial system is on the brink of chaos, propelled by unchecked government actions and flawed Keynesian economic policies. Drawing from the principles of the Austrian school of economics, Jake views Bitcoin not merely as a digital asset but as a crucial step towards rectifying a failing monetary system. His libertarian views reinforce his stance that just as the church was separated from the state, so too should money be freed from governmental control.

For Jake, Bitcoin represents more than just an investment; it's a peaceful revolution. He envisions a future where Bitcoin fosters a sustainable and responsible financial framework for generations to come. His advocacy is not about opposition but about evolution, about laying the groundwork for a system that prioritizes transparency and equity over secrecy and inequality.

As a journalist, Jake’s articles are crafted with the precision of a scholar and the passion of a true believer. He provides not only news but also thoughtful analysis that connects the dots between daily developments and larger economic theories. His work is a beacon for those lost in the technical jargon often associated with crypto discussions, illuminating the practical implications and benefits of these technologies.

In summary, Jake Simmons is not just reporting on a revolution; he wants to be part of it, fully committed to enhancing public understanding and adoption of Bitcoin and cryptocurrencies. His work is more than just a collection of articles; it’s a resource, a guide, and a companion for anyone ready to explore the potential of this digital frontier. Whether you are taking your first steps into crypto or are a veteran looking to stay on top of the latest trends, Jake’s insights provide clarity and foresight in an often unpredictable industry. Join him on this journey to reshape the world of finance, one post at a time.

You can engage with his latest takes on Twitter: @realJakeSimmons.

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