Stacks (STX) price prediction: What is Stacks?

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Stacks aims to get Bitcoin doing what Ethereum is doing – and Stacks (STX) is its coin

An illustration of Stacks on a digital circuit                                 
Stacks lets people use smart contracts on the Bitcoin blockchain – Photo: Shutterstock
                                

Contents

The Bitcoin blockchain is famous even among people who are not interested in cryptocurrency. However, there are some things that it cannot do. The Stacks blockchain and its accompanying cryptocurrency Stacks (STX) aim to solve that.

So what is Stacks (STX)? How does Stacks work? What is Stacks used for? What is the Stacks price prediction? Let’s take a look.

Stacks explained

Bitcoin is the original and largest cryptocurrency blockchain. In fact, it is a mark of how synonymous Bitcoin has become with crypto as a whole that crypto coins which are not BTC are all classified together as altcoins.

However, while the Bitcoin blockchain is undoubtedly powerful, it does have some disadvantages. Its biggest rival, Ethereum, does things of interest to developers that Bitcoin cannot. For example, programs based on smart contracts – computer programs which automatically execute once certain conditions are met – can be run on Ethereum, but not on Bitcoin. Likewise, Ethereum supports decentralised applications (dApps), which Bitcoin does not. 

Stacks aims to change all of this. It is a blockchain that connects to the Bitcoin blockchain and allows people to use features such as dApps and smart contracts effectively on Bitcoin. Transactions are carried out on Stacks and finalised on Bitcoin, meaning users can, theoretically, utilise the newer blockchain’s speed and the older one’s strength.

The version of the Stacks blockchain that is now in use came out in late 2020, replacing another blockchain which had existed since 2018.

STX is the native token of Stacks. As the whitepaper says: “Stacks miners use Bitcoin (BTC) 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.”

More than that, though, STX is also used to power smart contracts. Ultimately, there are two kinds of STX users. STX miners verify transactions and add blocks to the blockchain, while STX users stake their Stacks coin by locking it in for a reward cycle of approximately two weeks, in order to run a node on the network. They then get paid rewards in Bitcoin. 

In order for the transfer of information between the two blockchains to work, Stacks uses something called a proof-of-transfer consensus mechanism. This means that, in effect, people pay with BTC to mint new STX.

Stacks was founded in 2013 by Muneeb Ali, a Pakistani-American computer scientist, and Ryan Shea, a New York-based software engineer, although the blockchain as we know it started in 2018. 

From the Stacks 2.0 whitepaper: Bitcoin and its rationale

The Stacks 2.0 draft whitepaper was published in December 2020. According to the document, Stacks brings apps and smart contracts to Bitcoin without modifying it. The idea is that “decentralised apps and use cases will eventually get built on Bitcoin, the strongest and most widely used blockchain network, instead of disconnected networks”.

The document goes on to say: “In the early days of the internet, there were several competing protocols. TCP/IP emerged as the winning standard, and everything else was built on it. Bitcoin is that standard for crypto.” 

Price history

While past performance is not an indication of future results, knowing how a coin has behaved in the past can help us understand and contextualise any Stacks price prediction. 

STX launched on the open market in 2019, and starting trading on 28 October that year at $0.2308. There was, however, a dip, and it closed the year down at $0.9511. The next year was one of peaks and troughs, although a bull run towards the end saw STX close 2020 at $0.3962.

The early months of 2021 saw seriously bullish activity in the crypto market, and STX was caught up in the excitement. The token broke through the $1 mark on 24 February 2021 and the $2 barrier on 5 April, when its intraday high of $2.82 represented a record price for that time period. But things could not last and the price of Stacks was already on the slide when the crypto market crashed on 19 May 2021, sending the coin spiralling down until it dropped to below $1 in June.

There was some recovery in June, July, and August, with STX consistently trading over $1, but it was not until 9 October 2021 that it re-emerged above $2. This was a time of more bullish behaviour in the crypto market and, again, STX was involved. The culmination of this growth came when Stacks reached its all-time high of $3.61 on 16 November 2021.

The market then entered a slump, with uncertainty surrounding the Omicron variant of Covid-19 an issue for many would-be investors. Nevertheless, at the end of the year, STX was trading at $2.17, a respectable figure and one which represented a rise of nearly 450% from the end of 2020.

January 2022 saw the price go down a bit before it made something of a recovery, and by 17 January, Stacks was trading at around $2.08. February also ushered in an aggressive downtrend, and by the end of the month, the coin was trading at lows of $1.16. The coin fell further to a new eight-month low of $1.04 on 7 March 2022.

However, on 10 March 2022, cryptocurrency exchange Okcoin launched the Bitcoin Odyssey. The year-long pledge among venture capital firms aims to deploy $165m into products that accelerate Bitcoin adoption, which in turn caused the coin to skyrocket. Bucking a market-wide downtrend, Stacks managed to close 31 March 2022 at $1.44.

However the price increase was not sustainable and, from that price point, a rapid descent ensued. Adding to a series of sustained losses over the last several months, Bitcoin, the most popular cryptocurrency, had lost over 70% of its value since its all-time high in mid-November, as many analysts have now confirmed a crypto winter.

A new mining model has been proposed for the platform, and OkCoin has released the Bitcoin Odyssey Fund. The $165m fund will be used for the development of dApps on Stacks and Bitcoin, but will it help STX rally?

As of 17 August 2022, the STX token is currently trading at $0.46, down almost 90% from its all-time high nine months ago. At this time, there were 1.33 billion Stacks coins in circulation out of a maximum supply of 1.82 billion. The crypto’s market capitalisation is around $607m, making it the 72nd-largest cryptocurrency by that metric. Can we make a Stacks coin price prediction?


Stacks price forecast

As we look at a Stacks price prediction for 2022, keep in mind that forecasts, especially long-term ones, are often wrong. In particular, longer-term crypto predictions are often made using algorithms, which can change at very short notice. 

DigitalCoinPrice says Stacks should be worth around $0.62 in September this year and $0.63 in December. The site forecasts an average price of $0.65 in 2023, increasing slightly to $0.69 in 2024. 

The site makes a Stacks price prediction for 2025 of $0.89, while suggesting that it should drop in 2026 to $0.83. There will be a recovery, though, and the site believes that in 2027 we will be looking at a Stacks target price of $1.07. The growth will continue, it says, with the token reaching $2.12 in 2030.

PricePrediction foresees that Stacks will trade at a maximum price of $0.62 in 2022. The site suggests an average price of $0.84 in 2023, $1.23 in 2024, and $1.70 in 2025. Going further, the site gives a Stacks price prediction for 2030 which sees it trade at around $12.13 before hitting $17.96 in 2031.
 
Finally, WalletInvestor has an STX price prediction which says the token will go down to $0.01 in 12 months’ time, with no prospect of a recovery.

Stacks concept

Before we finish, a few things to note. Firstly, Stacks has an interesting concept. The idea of being able to do things on Bitcoin that are traditionally associated with the likes of Ethereum could well be successful. However, we do need to point out that it is entirely possible that another network or blockchain could come along, doing much of the same thing, and end up taking users away from Stacks.

Secondly, there is a lot of concern about the environmental impact of blockchains like Bitcoin, which uses the energy-intensive proof-of-work model. If and when Ethereum transfers over to the comparatively greener proof-of-stake consensus mechanism, it could well take users from Bitcoin, leaving the likes of Stacks – which requires Bitcoin to operate – high and dry.

FAQs

How many Stacks coins are there?

On 17 August 2022, there were 1.33 billion Stacks coins in circulation, out of a maximum supply of 1.82 billion.

Is Stacks a good investment?

It might be. You do need to be cautious, which is why you will need to do your own research and never invest more than you can afford to lose.

Will Stacks go up?

It might. The market has been somewhat bearish as of late. That said, cryptocurrencies can be highly volatile and prices can go down as well as up, which is why you should never invest more than you can afford to lose.

Should I invest in Stacks?

Only you can answer this. Before you do, you must do your own research, remember that prices can go down as well as up, and never invest more money than you can afford to lose.

Further reading

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