The possibility of Bitcoin NFTs being accepted on Stacks has driven the STX price to new year-over-year highs, but there are concerns if the bullish thesis becomes a reality.
Stacks was one of the first blockchains to offer a way to mine Bitcoin
BTC
fell to the ground
21 584 dollars
Ordinals, putting him in a good position to take advantage of the alarm. However, Ordinals cited a case from the past where Bitcoin’s maximalist views would be tested if NFTs caused gridlock.
In addition, Stacks does not yet offer all the functionality required to support an NFT trading ecosystem, and faces competition from projects in other blockchain ecosystems. A fundamental and technical analysis of the project suggests that rising prices may have reached overbought conditions and could correct in the short term.
The development of the Ordinals is unpredictable at this point
The recent focus on overwriting NFTs on the Bitcoin network peaked in the last month with Casey Rodarmor signing Ordinal on January 29th. Despite the trend beginning to be extreme, the technology is limited to users with Bitcoin nodes, and trading primarily occurs through OTC channels.
Compared to the Ethereum NFT markets, the infrastructure for Bitcoin NFT trading is still very advanced with respect to complex activities such as decentralized trading. Many investors have expressed their belief that there must be a way to develop NFT trading strategies and markets for Ordinals.
The Bitcoin creator community has previously discouraged using the network for anything other than payments because it costs space and increases transaction fees. During the successful 2020 and 2021 cycle, many Ethereum users paid hundreds of dollars in transaction fees as user activity peaked. On the other hand, Bitcoin fees have been relatively stable throughout the boom, but program adoption and gains have lagged behind Ethereum.
According to a report by CoinShare, the adoption of Ordinals will again depend on a socially accepted method of inputting additional data into the Bitcoin blockchain, which will cause problems such as network congestion and increased fees.
The report goes on to examine previous failed attempts to use the Bitcoin blockchain for smart contract services, stating that “Bitcoin’s previous similar projects have had little impact on investors and users alike.”
The number of ordinals registered in Bitcoin skyrocketed in early February when the tool exploded. However, the trend was tempered by the lack of trading infrastructure, with less than 10,000 NFT recorded on most days.
Deploy native blockchain STX
STX
fell to the ground
$0.63 per square meter
token surged 256% in February, thanks to the hype around Bitcoin NFTs and the project’s upcoming development.
It remains to be seen how the Bitcoin community reacts to network congestion and increased Bitcoin fees when the noise of Ordinals increases.
The price of the shelf increases due to speculation, while the activity is low
The idea is that Stacks will make Bitcoin Ordinals more accessible to users by reducing mining and market acquisition processes.
The Stacks Foundation, the group overseeing the blockchain, announced on February 22 a new version of the system, Stacks 2.1, which seeks to improve the blockchain by adding EVM and synthetic Bitcoin (sBTC) integration through Bitcoin secure bridge.
Additionally, the .BTC naming service resides on the Stacks network, which could attract more trading activity if demand for .BTC addresses increases. In its current form, the bulk of a .BTC Stacks address comes from the Bitcoin network. That is, users cannot send and receive Bitcoin to these addresses like its .ETH counterpart.
After the 2.0 update, Stacks will enable Stacks assets to be sent directly to Bitcoin addresses. It will allow a proxy to access the Bitcoin blockchain without creating a separate Stacks address. It remains to be seen if Bitcoin users find this feature attractive.
While the developments look promising, there is insufficient blockchain activity to justify an increase in the price of STX. Only about 1,000 active unique wallets worked with DApps on Stacks in February. The most surprising part of Stack’s usage data is that the NFT Gamma market also failed to attract serious users to its platform, with fewer than 100 wallets sold daily on the market.
