Stacks (STX) rises 26% after support from Tim Draper

Bitcoin (BTC) Layer 2 blockchain stacks (STX) have risen again after billionaire investor Tim Draper expressed support for the emerging protocol.

Trading at just $1.18 on Tuesday afternoon, the asset is trading at $1.53 at the time of writing – a 26 percent increase after the venture capitalist's comments circulated on social media.

Bitcoin migration

In an interview with Coinbase earlier that day, Draper called it the first “demonstration” of the crypto project he learned more about this year.

In the year Launched in January 2021, Stacks is a smart contract and NFT-compatible blockchain that settles all transaction data on the Bitcoin blockchain. It's an effective scale for BTC that enables features better known on other networks – such as smart contracts, decentralized applications, and NFTs.

“Most of the things I've invested in are things that are starting to migrate useful applications to Bitcoin,” Draper said. I think this is a very interesting trend, and we think it will go very much the way Microsoft did.

As Draper explained, Microsoft bought and developed several Internet software companies after years of experimenting and seeing smaller software companies succeed. For example, WordPerfect – a word processing application that gained popularity in the early 1990s – was later adopted by Microsoft as Microsoft Word.

Draper believes a similar pattern is playing out for Bitcoin, where developers find ways to migrate applications from newer networks like Ethereum, Solana and Tezos after they've proven they've stood the test of time.

“It's starting to happen — a consolidation around Bitcoin,” Draper said, adding that it has “the strongest brand” compared to other coins.

Draper Says Ignore Bitcoin FUD

Investors have long supported Bitcoin as a superior alternative to fiat currency thanks to its superior decentralization and security. Although the network may face technical limitations that result in slow and inefficient transactions, Phase 2 innovations such as the Lightning Network are already reducing stress, he noted.

“I think a lot of the old arguments are going out and new arguments are coming in that say, ‘Hey, let's level Bitcoin,'” he said.

Earlier this year, the newly developed Ordinal protocol enabled NFTs and tokenization on the Bitcoin network, which was once thought impossible at the network's base layer.

The popularity of Ordinals was coupled with the growing interest in Stacks, whose founding team mostly supported Ordinals and whose protocol also supported Bitcoin-based NFTs.

“Tim Draper is a famous investor and seeing him excited about Stacks and Bitcoin L2s made my day,” Stacks co-creator Munib Ali said on Tuesday.