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Bitcoin Layer 2 Coins, STX, ELA, SAVM, Outperform BTC After Halving

Apr 21, 2024
    Top Bitcoin Layer 2 coins have risen 5% to 20% since halving, leaving BTC behind.The BTC-beating rise comes amid Runes-led spike in transaction fees on the Bitcoin blockchain.
Since the anticipated mining reward halving on the Bitcoin blockchain went into effect on the weekend, tokens related to Bitcoin Layer 2 solutions have surpassed the performance of Bitcoin (BTC).
The price of STX, the native token of the leading Bitcoin Layer 2 network Stacks, has surged approximately 20% to reach $2.87 following the quadrennial halving event that decreased the emission rate of Bitcoin per block from 6.25 to 3.125 BTC. As reported by CoinGecko, Bitcoin itself has experienced a modest increase of around 4.7%, touching $66,300. STX currently ranks among the top-performing cryptocurrencies within the top 25 bracket over the past 24 hours, according to Velo Data.

Coins within the Layer 2 category, such as Elastos’ ELA token and SatoshiVM’s SAVM, have experienced growth of around 11% for ELA and 5% for SAVM following the halving event.

Bitcoin Layer 2 solutions are projects that address scalability and transaction speed limitations on the Bitcoin blockchain. They are built on top of the Bitcoin blockchain and bring scalability by processing transactions off the main chain.

Ethereum Layer 2 projects primarily work on enhancing the scalability of its smart contract blockchain. In contrast, Bitcoin Layer 2 initiatives are geared towards increasing the capacity and incorporating programming capabilities into the main Bitcoin blockchain, which doesn’t use an Ethereum-like virtual machine for execution.

After the Bitcoin halving, fees for transactions on the Bitcoin network significantly increased, causing a surge in interest for Bitcoin Layer 2 coins that have outperformed the market. According to Glassnode data, the average transaction fee climbed up to approximately 0.0020 BTC following the halving event, marking the highest level since early 2018.

The surge in fees can be attributed to the introduction of a new protocol named Runes, which empowers users to create and inscribe tokens on the Bitcoin blockchain. Following its release, there was a frenzy among speculators to mint tokens and trade meme coins, resulting in heightened transaction activity and consequently, higher transaction costs.

Based on information from Ord.io, there were approximately 3,700 Rune inscriptions on the Bitcoin blockchain when last checked.

Bitcoin Layer 2 Coins, STX, ELA, SAVM, Outperform BTC After Halving

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2024-04-22 09:42