StakingMarketRegulationCryptostake ExplainsUncharted
Bitcoin Layer 2 Tokens Rally Post-Halving, Outshining the Dominant Coin

The overwhelming performance of Bitcoin Layer-2 coins after the halving 

In the wake of Bitcoin’s recent halving event, Layer 2 coins associated with the Bitcoin blockchain have posted significant gains, outperforming Bitcoin itself.

Key takeaways:

  • Bitcoin Layer 2 tokens have seen increases ranging from 5% to nearly 20% since the halving.
  • STX leads with a 20% rise, significantly outstripping BTC's more modest 4.7% gain.
  • The surge in transaction fees post-halving has coincided with increased activity on these networks.

Since the recent halving of the Bitcoin blockchain, which saw the mining reward drop from 6.25 BTC to 3.125 BTC per block, tokens associated with Bitcoin Layer 2 solutions have significantly outperformed Bitcoin. According to CoinGecko, STX, the native token of the Stacks network—a leading Bitcoin Layer 2 project—has soared nearly 20% to $2.87. Meanwhile, Bitcoin has seen a modest increase of just over 4.7%, reaching a price of $66,200. 

Other notable Layer 2 tokens, such as Elastos' ELA and SatoshiVM’s SAVM, have also posted gains of 11% and 5% respectively. These tokens facilitate improved scalability and transaction speed on the Bitcoin blockchain by processing transactions off the main chain, offering a compelling value proposition to investors.

Market dynamics and future outlook for layer 2 solutions

The ascent of Bitcoin Layer 2 coins is occurring amidst a broader increase in transaction fees on the Bitcoin blockchain, which have surged to their highest levels since early 2018, peaking at nearly 0.0020 BTC per transaction as reported by Glassnode. This spike is partially attributed to the launch of the Runes protocol, which allows users to mint and trade tokens directly on the Bitcoin blockchain, leading to heightened transaction activity. 

The debut of Runes alone led to 3,700 inscriptions, indicating robust engagement and speculative interest. This emerging trend underscores the strategic importance of Layer 2 solutions in enhancing Bitcoin's functionality and scalability, positioning them as vital components of the blockchain ecosystem moving forward.