Bitcoin (BTC) layer 2 blockchain Stacks (STX) has soared again after billionaire investor Tim Draper voiced support for the emerging protocol.
Trading for just $1.18 at 7 pm ET on Tuesday, the asset trades for $1.53 at writing time – a 26% rise since the venture capitalist’s comments made the rounds on social media.
The Bitcoin Migration
During an interview with Coin Bureau earlier that day, Draper named Stacks as the first “showstopper” of a crypto project that he learned more about this year.
Launched in January 2021, Stacks is a smart contract and NFT-compatible blockchain that hashes and settles all of its transaction data onto the Bitcoin blockchain. It is effectively a scaling layer for BTC that also enables features better known on other networks – such as smart contracts, decentralized applications, and NFTs.
“Most of what I’ve been investing in have been things that start to move the important applications over to Bitcoin,” said Draper. “I think that’s a very interesting trend, and we think it’s gonna go very much the way Microsoft did.”
As Draper explained, Microsoft bought and developed several internet software applications after seeing smaller software companies succeed at them after several years of experimentation. WordPerfect, for example – a word processing application that peaked in popularity in the early 1990s – was later adopted by Microsoft as Microsoft Word.
Draper believes a similar pattern is playing out for Bitcoin, in which developers find ways to migrate applications from newer networks like Ethereum, Solana, and Tezos after they’ve proven to stand the test of time.
“It’s starting to happen – a consolidation around Bitcoin,” said Draper, adding that it has the “strongest brand” compared to other coins.
Ignore Bitcoin FUD, Says Draper
The investor has long backed Bitcoin as a superior alternative to fiat currency thanks to the former’s superior decentralization and security. Though the network may face technical limitations causing slow and inefficient transactions, he noted that layer 2 innovations like the lightning network are already quelling such concerns.
“I think that most of those old arguments are moving out and that new arguments of ‘hey, let’s standardize on Bitcoin’ are moving in,” he said.
Earlier this year, the newly developed Ordinals protocol ushered in major adoption of NFTs and tokenization on the Bitcoin network that was once thought impossible on the network’s base layer.
The popularity of Ordinals was coupled with rising interest in Stacks, whose founding team is largely supportive of Ordinals, and whose protocol also supports Bitcoin-based NFTs.
“Tim Draper is a legendary investor and seeing him excited about Stacks and Bitcoin L2s made my day,” said Stacks co-creator Muneeb Ali on Tuesday.
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