As we bid farewell to the first month of Q2, Bitcoin closes with a monthly red candle, signaling a correction phase. Just like how everyone passes gas, corrections are inevitable in a bullish run. However, for those eager to stay informed about significant dates or events in the Bitcoin realm, a must-read articles covers essential points to keep an eye on throughout Q4 2024.
In the crypto world, Q1 saw several dominating narratives, including real-world asset memes, Bitcoin Liquid restaking tokens, and more. But what narratives can we expect for Q2 through Q4, especially after the approval of the Bitcoin Spot ETF in the US and Hong Kong?
One strong narrative closely tied to Bitcoin is Bitcoin Layer 2. For instance, the Bitcoin 5 Run has seen network and value increases up to 180. Additionally, the upcoming Bitcoin Layer 2 Summer promises further advancements in this domain.
So, what exactly is Bitcoin Layer 2? It's a novel solution for crypto projects aiming to have Ethereum Virtual Machine (EVM) compatibility while retaining Bitcoin's security and utilizing Bitcoin for gas fees. Hence, Layer 2 chains are built to leverage Bitcoin's security while supporting smart contracts. Several Layer 2 projects might serve as primary drivers in the upcoming quarters, with the essence being scaling solutions for the Bitcoin network without the need for forks.
The discussion then delves into various Layer 2 projects:
Stacks (STX): Known as one of the most established Layer 2 solutions, Stacks has been outperforming Bitcoin since 2023. Despite being labeled a "zombie chain" by Forbes due to high valuation but minimal user activity, with the Nakamoto upgrade and a maturing Bitcoin ecosystem, Stacks appears poised for significant adoption.
Merlin: Launched with the aim of enhancing Bitcoin scalability and efficiency through zk-rollup technology, Merlin has already launched its mainnet and garnered considerable Total Value Locked (TVL).
Bevm: Positioned as a fully decentralized EVM-compatible Bitcoin Layer 2, Bevm allows Ethereum ecosystem dApps to run on the Bitcoin Layer 2 network.
B Square Network: Backed by prominent names, B Square Network promises transactions that are 50 times cheaper and 300 times faster than the Bitcoin network.
Core: Supporting EVM smart contracts, Core utilizes a Satoshi-plus mechanism, combining Proof of Stake and Proof of Work. Despite a relatively low TVL, Core's unique features, including income for Bitcoin miners and token delegation, are notable.
Satoshi VM: Enabling developers to build Bitcoin dApps using smart contracts, Satoshi VM utilizes zk-rollup technology to batch and validate transactions.
BitVM and Bit Layer: Still in the testing phase, these projects aim to be EVM-compatible Bitcoin Layer 2 solutions, though details are scarce.
R Stock and Liquid Network: Both offer Bitcoin Layer 2 solutions with various features, including the ability to issue digital assets.
While Bitcoin Layer 2 narratives offer promising opportunities, caution is warranted. Despite their Bitcoin branding, these projects are altcoins, and it's essential to maintain a diversified portfolio with the majority in Bitcoin. Moreover, with the nascent stage of many Layer 2 projects and the competitive landscape, careful consideration and monitoring are crucial.
In conclusion, while Bitcoin Layer 2 narratives present exciting prospects, investors and enthusiasts must navigate them judiciously in the dynamic crypto market.
