For years, Bitcoin was just digital gold, something you held. Now, a movement called BTCFi is giving it jobs to do, pushing the original cryptocurrency out of its long-held role as a passive store of value and into the world of decentralized finance it originally inspired.
This shift aims to put Bitcoin’s trillion-dollar war chest to work, and the Bitcoin Layer 2 project Stacks (STX) is positioning itself as the main pipeline for this new financial system.
Nakamoto upgrade – Stacks gets a new engine!
Stacks just rolled out its biggest change ever – The Nakamoto upgrade. This overhaul directly attacks the problems that made building on Bitcoin a nightmare – Speed and certainty. The hard fork cuts the connection between Stacks and Bitcoin block times, chopping the painful 10-minute wait for a new block down to mere seconds.
More importantly, the upgrade delivers what they call 100% Bitcoin finality. Once a Stacks transaction clears, it’s as locked-in and final as one on Bitcoin itself.
This gives developers and big-money apps the confidence that their transactions won’t get reversed, cementing Stacks’ reputation as a secure and fast L2 for Bitcoin.
sBTC – Building a trustworthy bridge for Bitcoin’s trillions
The real game-changer enabled by Nakamoto is sBTC. It’s a token pegged 1:1 to Bitcoin, but without the baggage of centralized projects like Wrapped Bitcoin (WBTC), where you have to trust a central company to hold the keys. sBTC aims for a more censorship-proof and trustless design.
It works by using a decentralized crew of “signers” who have skin in the game to keep the peg honest. This design lets people lock up their real BTC and use it directly in smart contracts on the Stacks layer, finally tapping into a massive, idle pool of capital.
We could soon see a wave of new financial tools, from lending platforms to trading venues, all running on native Bitcoin liquidity.
Money is flowing into a booming ecosystem
The promise of these upgrades has already sparked a fire under the Stacks ecosystem. According to DefiLlama, for instance, the total value locked (TVL) in Stacks DeFi climbed to around $118 million.
Source: DeFiLlama
That’s a huge jump from last year, with reports from June 2024 showing a record-breaking 150 million STX tokens committed to DeFi apps.
A few key projects are fueling this growth –
- Zest Protocol – As the top lending app on Stacks, Zest holds the lion’s share of the value with a TVL of $76.8 million.
- Stacking DAO – This liquid staking service is a fan favorite, letting users earn Bitcoin yields on their STX without locking it up. It boasts a $48.4 million TVL and had over 34,000 users early in the year.
- Bitflow – The go-to decentralized exchange has become a core liquidity spot, with a $9.46 million TVL and healthy trading activity.
- ALEX – This exchange and launchpad is still a major player, though it’s recovering from an $8.3 million smart contract hack in June 2025. The incident serves as a brutal reminder of the risks that come with building in DeFi.
The $20 question – What would it take?
So, can STX actually hit $20? A $20 price tag, up from its press time price of $0.62, would catapult its market cap to an eye-watering $35.8 billion.
Source: STX/USD, TradingView
That’s not just big. Instead, it would dwarf the all-time highs of Layer 2 legends like Polygon ($20B-$22.78B), Arbitrum ($12.72B), and Optimism ($8.65B) during the last bull run’s frenzy. To get there, Stacks wouldn’t just need to win the BTCFi race. It would need to command a valuation bigger than anything its L2 predecessors ever achieved.
Tailwinds and headwinds on the road ahead
Getting to that valuation will be a tough fight with clear opportunities and serious obstacles.
What could launch STX to the moon?
- Big money needs a paycheck – Spot Bitcoin ETFs opened the floodgates for institutional cash. Now, those investors want to earn yield on their mountains of BTC, creating massive demand for the very services Stacks is built to offer.
- Tech is finally here – With the Nakamoto upgrade fully online and sBTC gaining traction, the network is more useful and attractive than ever.\
- A story that sells – The idea of “activating Bitcoin’s dormant capital” is a powerful story that grabs attention in a market always looking for the next big thing.
What could keep it grounded?
- A crowded, dangerous field – The Bitcoin L2 space is no longer empty. Competitors are popping up, and the ALEX hack shows just how quickly a security flaw can kill confidence.
- Too complicated – Getting new users and developers on board is a major hurdle. The Clarity smart contract language, while secure, is a tough sell for developers used to the EVM world, which could slow down growth.
- Long arm of the law – Regulators worldwide are still figuring out what to do with DeFi. Ongoing confusion in the U.S. and E.U. about how to classify tokens and who is responsible when things go wrong casts a shadow over the entire industry.
In the end, it all comes down to execution. If Stacks can deliver a secure and seamless sBTC, simplify the experience for everyday users, and build a vibrant community of developers, it could create unstoppable momentum.
If it nails that, the $20 prediction might look less like a pipe dream and more like a forecast.