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Publication date: May 1, 2025
Back in early 2025, we discussed the innovative Stacks project, which since its launch in 2017, aims to link smart contracts to bitcoin transactions. This week, we turn our attention to Stacks again as the project has once again been in the spotlight of crypto investors in recent weeks. You can read our earlier article here.
What is Stacks again?
What makes Stacks extra interesting is that it is the only platform that enables smart contracts and DeFi directly on top of Bitcoin without compromising the security of the Bitcoin network.
Thanks to its unique Proof of Transfer (PoX) mechanism, new STX tokens are "mined" by using Bitcoin. This creates a direct economic link between the two networks. Stacks opens the door to a new generation of Bitcoin-based applications.
Recent developments
Stacks has evolved significantly in recent months, taking full advantage of the growing interest in Bitcoin-based applications. Below, we list the most important recent developments that may determine the future of the network and the value of the STX token.
- Nakamoto Release imminent:
The most talked-about development within Stacks is the expected Nakamoto upgrade in Q2 2025. This upgrade promises a huge improvement in the speed and reliability of transactions. This is where "Bitcoin finality" will be introduced. In plain language, this means that transactions on Stacks will be considered final almost immediately once they have been processed on the Bitcoin network. This makes Stacks particularly suitable for applications such as DeFi and institutional transactions. - Bitcoin halving and rising interest in BitcoinFi:
With the recent Bitcoin halving and the broader bullish trend around BTC, attention is also growing on protocols that work with Bitcoin. The term BitcoinFi, or decentralized financial applications on top of Bitcoin, is gaining traction. Stacks is directly benefiting from this trend, with new protocols such as ALEX and Zest Protocol bringing liquidity and borrowing capabilities to the network. - Growing institutional attention:
Various funds and venture capital parties are increasingly investing in projects on Stacks. There has also been an increase in users staking their STX tokens to earn returns, thanks to improved user interfaces and integrations with wallets such as Xverse and Hiro Wallet.
With these recent developments, Stacks continues to build on its position as the main bridge between Bitcoin and the world of smart contracts and DeFi. The coming months will be crucial: the successful rollout of the Nakamoto upgrade and the continued growth of BitcoinFi could take the network to the next level. For investors and users who believe in the power of Bitcoin as well as its expansion into new applications, Stacks appears to be a project to continue to follow closely.
Price movement and market sentiment
In April 2025, the price nearly doubled in a short period and arrived in the $1 zone. The sharp rise can be attributed to several factors:
Integration of sBTC by BitGo
In April 2025, BitGo announced that it would integrate synthetic Bitcoin (sBTC) into its platform. This move facilitates institutional access to the Stacks ecosystem.
Strong growth of the DeFi ecosystem
In the first quarter of 2025, Stacks' DeFi ecosystem saw impressive growth of more than 400% in stablecoin supply.
Technical breakout from downtrend
STX broke the downtrend and reached a two-month high of $0.92 on April 25, 2025. This technical breakout suggests a possible trend reversal
Correlation with Bitcoin's price appreciation
April's STX price rise was driven in part by Bitcoin's strong performance. Investors who regained confidence in Bitcoin see Stacks as an interesting option within the same ecosystem.
What could drive up the price of Stacks?
1. Launch of Nakamoto: Successful rollout of this upgrade will greatly improve Stacks' speed and reliability.
2. Growth of BitcoinFi: More use of DeFi on top of Bitcoin means more demand for STX.
3. Network adoption: An increase in the number of active wallets, dApps, and stacked tokens strengthens the ecosystem.
4. Partnerships and integrations: Collaborations with wallets, exchanges, and DeFi protocols can make STX more visible and user-friendly.
What can thwart the price of Stacks?
1. Delay of Nakamoto release: Any delay or technical error can damage trust in the network.
2. Competition from other Bitcoin L2s: Other projects, such as Rootstock and Lightning Labs, are also building smart contract capabilities on Bitcoin.
3. Regulation and market volatility: As with all crypto assets, broader market pressures can negatively impact the price.
4. Dependence on Bitcoin: Because Stacks is built on Bitcoin, it is partially dependent on the success of BTC itself.
Conclusion
Stacks moves into a unique niche: it offers smart contracts and DeFi on Bitcoin, a combination in which there is growing interest. With the upcoming Nakamoto release, strong fundamentals, and increasing adoption, STX seems well-positioned to benefit from the broader growth of BitcoinFi. Still, caution remains necessary, especially in light of competition and potential delays.
For investors who believe in the future of Bitcoin as well as the expansion of its functionality, Stacks may be an interesting position to keep an eye on. The coming months, especially Nakamoto's launch, will be crucial for the project's share price development as well as its image.
Disclaimer: Investing involves risk. Our analysts are not financial advisors. Always consult an advisor when making financial decisions. The information and tips provided on this website are based on our analysts' own insights and experiences. They are therefore for educational purposes only.
