By
Svetlana Soroka
April 30th, 2024
As Bitcoin (BTC) gets adopted globally led by institutional investors, Web3 developers have channeled focus to build smart contracts on the oldest blockchain.
The heightened demand for Bitcoin (BTC) as an asset class by institutional investors has significantly bolstered its bullish sentiments. On Monday, MicroStrategy Inc (NASDAQ: MSTR) announced that it recently acquired 3,000 Bitcoins at $155 million, thus cumulatively holding 193,000 BTCs. Additionally, CoinShares, a leading European digital asset investment company, announced that the crypto market recorded a total cash inflow of around $598 million with the majority destined for Bitcoin’s spot ETFs.
Consequently, the Bitcoin price rallied to a fresh yearly high of around $56,700 in the past 24 hours. The notable Bitcoin rise, especially before the upcoming halving, has increased the overall crypto bullish outlook, particularly Web3 projects with real-world utility like Layer-Two (L2) networks.
Bitcoin L2 Networks and BRC-20 on the Rise
As BTC price reached a new 25-month high, L2 tokens for networks working on enabling smart contracts on Bitcoin experienced a significant surge. According to on-chain data analysis provided by LunarCrush, the excitement for Bitcoin’s layer-two network has resulted in a huge increase in their social activity.
The notable increase in social activity for Bitcoin L2s has helped increase their respective tokens’ liquidity and trading volume.
Which asset has seen the largest increase in social activity over the last year? One of the strongest has been $STX. With excitement about #Bitcoin Layer 2s increasing, so has social activity for @Stacks.
Social interactions are up nearly 16,000% with activity accelerating as… pic.twitter.com/xPSJ8JyTCI
— LunarCrush (@LunarCrush) February 27, 2024
Stacks (STX), a top-tier Bitcoin Layer for smart contracts with around $140 million in Total Value Locked (TVL), registered gains of more than 25 percent in the past 24 hours to trade around $3.11 on Tuesday. According to market data provided by Binance-backed CoinMarketCap, Stacks (STX) recorded a 514 percent increase in daily average trading volume to about $600 million in the past 24 hours.
The Rootstock Infrastructure Framework (RIF), a leading Bitcoin-oriented smart contract network with around $165 million in TVL, registered gains of around 15 percent in the last 24 hours to trade about 22 cents on Tuesday. The RIF token has rallied more than 70 percent in the past four weeks, thus indicating the bulls are in control.
Other top performers in Bitcoin-L2 tokens include Interlay (INTR), and Map Protocol (MAP) with gains of around 5 percent in the past 24 hours.
Meanwhile, the BRC-20 market cap surged by around 6.4 percent to about $3.04 billion led by Ordi (ORDI), SATs (Ordinals), and Multibit (MUBI).
Bigger Picture and Market Outlook
The rise of Ethereum (ETH) as the leading blockchain in smart contracts has inspired the development of Bitcoin-oriented smart contracts. Moreover, Bitcoin has higher liquidity than Ethereum due to its notable adoption by institutional investors in the past year.
However, the Bitcoin network lags in terms of programmability compared to Ethereum, Solana (SOL), and Cardano (ADA). As a result, most of Bitcoin’s Layer-Two networks use a Bitcoin-pegged coin to enable the flagship coin to be used in the vast decentralized financial (DeFi) ecosystem. As of this report, the Bitcoin network had about $2 billion in TVL, according to data provided by DefiLlama.