Key Takeaways

• STX, a crypto that has been approved by the United States Securities and Exchange Commission, has performed well at a rough time for crypto. 
• Designed to support a platform that brings DApps to Bitcoin, it has been around since 2019.
• Can it maintain its run of good form, or is the bear market too strong?

The Stacks cryptocurrency is a rare outlier. One of the few cryptos explicitly approved  by the United States Securities and Exchange Commission (SEC), the coin, which helps people use the Bitcoin (BTC)  blockchain in much the same way they would Ethereum (ETH), still suffered when the market fell following the SEC’s lawsuits against Binance and Coinbase in early June 2023.

However, the news of investment firm Blackrock filing for a Bitcoin exchange-traded fund (ETF) helped boost the price later on in the month, with STX recovering from the market slump better than most, even if the best of the recovery was over by early July. 

Stacks has also been busy on the developmental front, launching its Stacks 2.1 upgrade earlier this year which enabled further connectivity with the Bitcoin blockchain.

But what is Stacks (STX)? How does Stacks work? Let’s take a look and see what we can find out, and also examine some of the Stacks price predictions that were being made on 21 June 2023, too.  

From the Whitepaper

Stack’s whitepaper  says that it wants to serve as a kind of bridge between the solidity of Bitcoin and the development potential of Ethereum.

It says: “Stacks is a Bitcoin layer for smart contracts; it enables smart contracts and decentralized applications to trustlessly use Bitcoin as an asset and settle transactions on the Bitcoin blockchain.”

Advantages and Disadvantages of Stacks

Blockchain analytics company Messari recently released a quarterly report  on Stacks. In it they highlighted its positive work with Bitcoin, and outlined some key advantages and disadvantages to the platform.

It found Stacks

• Had 9,174 average daily transactions, up from 5,564 year-on-year and 6,861 quarter-on-quarter.
• 3,054 average active daily addresses, up from 1,729 year-on-year and 2,265 quarter-on-quarter.
• An average market cap of $1.29 billion, down from $1.59 billion year-on-year but up from $290 million quarter-on-quarter.
• Total value locked (TVL) of $26.7 million, down from $45.7 year-on-year but up from $7.1 million quarter-on-quarter.

Advantages of Stacks

Messari says that Stacks

• Was able to cash in on growing interest in the Bitcoin blockchain earlier in the year, spurred by trading in Bitcoin Ordinals, the blockchain’s equivalent of non-fungible tokens (NFTs).
• Has a lot of potential for ecosystem growth.
• Can help give people access to Bitcoin mining pools, thus potentially lowering the need for a very powerful computer to mine BTC.

Disadvantages of Stacks

Messari also says Stacks

• Is potentially too reliant on the ALEX decentralized finance (DeFi) protocol, which has 90% dominance over the Stacks DeFi ecosystem.
• Uses inflation to reward its miners, therefore putting overall downward pressure on the price.
• Saw a 14.2% increase in the price of transactions over the three months.

With Messari’s report being broadly positive about Stacks, what does this mean about the Stacks price prediction?

First, though, let’s talk about what Stacks actually is.

Stacks (STX) Explained

One of the biggest splits in crypto is between Bitcoin (BTC) and Ethereum (ETH). At the heart of the debate is whether a blockchain should focus on supporting a crypto, like Bitcoin, or should allow people to build their own programs, like Ethereum. Since Bitcoin is the largest crypto out there, there will be people who want to use its reach and power to create their own decentralized applications (DApps) but the chain does not allow them to do so.

 Stacks, which was created by software engineers Muneeb Ali and Ryan Shea in 2013, with the first version of its blockchain coming in 2018 and the current chain coming online in 2020, hopes to change that. 

Supported by the STX coin, the platform is designed to connect with the Bitcoin blockchain and allows users to utilize smart contracts, computer programs that automatically execute once certain conditions are met, to create their own applications. 

How Stacks Works

Stacks makes use of a Proof-of-Transfer (PoT) consensus mechanism to add blocks to the blockchain and earn rewards. This means that users transfer a, in this case Bitcoin, to other participants in the network in order to secure and grow the blockchain, effectively paying with BTC to earn STX.

As far as the STX coin goes, the whitepaper explains how it works when it says: “Stacks miners use Bitcoin to mine newly minted Stacks. Stacks holders can lock their STX in consensus to earn Bitcoin, making STX a unique crypto asset that is natively priced in BTC and gives BTC earnings.” 

Apart from miners, there are other Stacks users called Stackers. These people stake their STX for about two weeks or so in order to run a computer, or node, on the network, earning Bitcoin for doing so. 

STX can also be bought, sold, and traded on exchanges. 

STX Price History

It’s now time to take a quick look at some of the highlights and lowlights of the Stacks price history . While past performance should never be taken as an indicator of future results, knowing what the coin has done since it first came on the market can help give us some useful context if we want to either make or interpret a Stacks price prediction.

When STX first came onto the open market in October 2019, it was worth about $0.23. The crypto’s price fluctuated, but not by much, before it grew towards the end of the following year to close 2020 at $0.3962.

Early 2021 saw a crypto bull market, and STX shot up, breaking past $1 in February and hitting a high of $2.82 on 5 April. After that, it was downhill again, with it briefly falling below the dollar in June.

In October, it went back up past $2 on its way to an all-time high of $3.61 on 16 November. The coin then dropped, but its end-of-year price of $2.17 represented an annual gain of nearly 450%.

2022 was not a good year for either crypto as a whole or the Stacks coin. Although it reached a high of $2.64 in January, it fell below the dollar following Russia’s invasion of Ukraine on 24 February, before recovering in March.

The collapse of the Terra blockchain in May sent STX crashing down and by 14 June it was worth $0.3091. The coin recovered to trade above $0.50 in August, but the collapse of the FTX exchange meant that it closed the year at $0.2097, more than 90% less than at the end of 2021.

So far, 2023 has been a bit more encouraging, although with some caveats. The coin went above the dollar for the first time in nearly a year in early March as it reached a high of $1.30 on 22 March, before falling back down by the end of the month.

On 21 June, it reached a high of $0.8673 before sliding back down to $0.6185 by 10 July. At that time, there were about 1.39 billion STX in circulation, out of a maximum supply of around 1.8 billion. This gave the coin a market cap of around $860 million, making it the 44th largest crypto by that metric. 

Stacks price analysis

While the market damage caused by the SEC’s lawsuits initially hit STX, dropping from an intraday high of  $0.6141 on June 5 to a low of $0.5331, it soon recovered, reaching $0.6773 on 7 June. On 10 June, though, the news that Crypto.com had suspended its US institutional trading saw it collapse to $0.4604.

Nevertheless, it was able to recover to start 20 June at $0.593, but then the Blackrock news saw it shoot up to $0.8673. Although it has dropped almost 30% since then,  it is still up nearly 35%% from its low on 10 June and is actually worth 0.7% more than before the SEC announced its lawsuits, making it a rare bull in a bearish market. 

Stacks Coin Price Prediction 

With that out of the way, let’s cast our eyes over some of the Stacks price predictions that were being made on 21 June 2023. It is vital to remember that price predictions, especially when it comes to something as volatile as crypto, are very often wrong. Also, it is worth pointing out that many long-term crypto price predictions are made using an algorithm, which means they can change at any time. 

First, CoinCodex  had a rather downbeat short-term Stacks price prediction, saying it would fall and rise over the coming weeks. By 15 July, it said, STX would drop to $0.5256, before recovering slightly to $0.5979 by 10 August. The site’s technical analysis was, perhaps unsurprisingly, extremely bullish, with 24 indicators making encouraging signals compared to just six making bearish ones.  

Stacks Forecast for 2023

In terms of other sites making a Stacks price prediction for 2023, CaptainAltCoin  said it fall to $0.5843 in September but then recover,  reaching $0.7175 by December, while Bitnation  saw it hit $0.9284 and DigitalCoinPrice  both saw it breaking past the dollar to reach $1.20. 

Stacks Forecast for 2025

When it came to making a Stacks price prediction for 2025, CaptainAltCoin was optimistic, saying STX would be worth $3.32 that year, while Bitnation was a bit more cautious, saying it would trade at $2.17, whereas DigitalCoinPrice said it would get to $2.10 in two years time. 

Stacks Forecast for 2030

As far as a more long-term Stacks price prediction for 2030 went, DigitalCoinPrice argued it could trade at $6.64 that year and Bitnation had it worth $5.26. Meanwhile, PricePrediction.net  had it break past the $10 barrier to trade at $11.68 at the start of the next decade. 

Is Stacks a Good Investment?

It is hard to say. On one hand, the crypto market can be an unforgiving place, as STX investors will have learned when their coin lost more than 90% of its value, a worse performance than the market average, in 2022.

On the other hand, the fact that STX has been given the SEC’s seal of approval should stand it in good stead during this time of regulatory uncertainty, while its links to Bitcoin could see it emerge as a real winner during a tough time. As always with crypto, you will need to make sure that you do your own research before deciding whether or not to invest in Stacks.

Will Stacks go up or down?

No one can really tell right now. While many of the longer-term STX price predictions are optimistic, price predictions end up being wrong more often than not. You should also remember that prices can, and do, go down as well as up. 

Should I invest in Stacks?

Before you decide whether or not to invest in Stacks, you will have to do your own research, not only on STX, but on other, similar, coins and tokens, like Polygon (MATIC) and Arbitrum (ARB). Ultimately, though, you will have to make this decision for yourself and, more importantly, you should make sure you never invest more money than you can afford to lose. 

FAQs 

How many Stacks are there?

On 10 July 2023, there were about 1.39 billion STX in circulation out of a maximum supply of around 1.8 billion.

Will Stacks reach $10?

It could do but, if it does, it won’t be for some time yet. PricePrediction.net saw it breaking past that mark in 2030, while DigitalCoinPrice suggested it would happen in 2032. 

What is Stacks used for?

The STX coin is used to reward people who are active on the Stacks blockchain, which helps people combine decentralized applications and the Bitcoin blockchain. 

Disclaimer 

Please note that the contents of this article are not financial or investing advice. The information provided in this article is the author’s opinion only and should not be considered as offering trading or investing recommendations. We do not make any warranties about the completeness, reliability and accuracy of this information. The cryptocurrency market suffers from high volatility and occasional arbitrary movements. Any investor, trader, or regular crypto users should research multiple viewpoints and be familiar with all local regulations before committing to an investment.