STX Token of Bitcoin Layer 2 Stacks Rises Amid Expectations of Increased Institutional Adoption from Bitgo Integration

STX, the native token linked to the Bitcoin layer-2 protocol Stacks, has seen a remarkable increase of 56% within the past week, emerging as the leading performer among the top 100 cryptocurrencies, driven by expectations of increased institutional interest.

The token reached a peak of 92 cents on Friday, marking its highest value in two months, after a more than 21% rise in just 24 hours, thereby securing the title of the day’s top gainer, as reported by CoinDesk.

Stacks is recognized as the foremost layer 2 solution for deploying smart contracts and decentralized applications on the Bitcoin blockchain. Recently, BitGo, a provider of digital asset custody solutions and supporter of the wrapped bitcoin (WBTC) token, enabled its clients to explore yield opportunities within Stacks by incorporating sBTC, a synthetic asset that mirrors Bitcoin (BTC) at a 1:1 ratio on the Stacks network.

“SBTC paves the way for programmable, decentralized financial products while maintaining the fundamental tenets of Bitcoin — and this is just the beginning,” stated Abishek Singh, a product manager at BitGo. “With more than $3 trillion in transactions processed and over $48 billion in staked assets, BitGo is in a prime position to assist institutions in accessing this new realm of Bitcoin utility.”

In the Stacks ecosystem, STX serves multiple functions, such as facilitating the link between the primary chain and Bitcoin, aiding in the development of smart contracts, and governing the network. It is also utilized for transaction fees and is integral to the proof-of-transfer consensus mechanism, which allows holders to earn BTC by locking their STX.

The sBTC token provides holders the means to engage in the Stacks DeFi ecosystem, while preserving its value in relation to the underlying bitcoin. The anticipated sBTC withdrawal feature, set to launch on April 30, will enable institutions to transition seamlessly between BTC and sBTC, paving the way for the creation of innovative applications that leverage the smart contract capabilities of Stacks alongside Bitcoin’s robustness.

Enhancing ecosystem liquidity

The liquidity within the Stacks-based DeFi ecosystem is on the rise, as the protocol announced via X early Friday, noting a staggering 400% increase in stablecoin supply during the first quarter, ranking third behind Morph and Cronos.

The overall stablecoin supply in the ecosystem has surged to nearly $7 million, up from roughly $1 million at the beginning of January, according to data from DefiLlama.