The cryptocurrency market continues to evolve, with innovation spreading beyond Bitcoin’s base layer. One of the most promising developments in recent months has been the rapid ascent of Stacks (STX), the leading Bitcoin layer-2 protocol enabling smart contracts and decentralized applications (dApps) on the world’s most secure blockchain. Recently, STX emerged as the top-performing asset among the top 100 cryptocurrencies, surging 56% over seven days and reaching a two-month high of $0.92.
This momentum is largely attributed to a pivotal integration with BitGo, one of the largest institutional digital asset custodians, which has opened the door for widespread institutional participation in Stacks’ growing decentralized finance (DeFi) ecosystem.
BitGo Integration Signals Institutional Confidence in Stacks
In a major development for Bitcoin-based DeFi, BitGo announced support for sBTC, a synthetic Bitcoin token that maintains a 1:1 peg with BTC on the Stacks blockchain. This integration allows institutional investors under BitGo’s custody to explore yield-generating opportunities on Stacks without sacrificing exposure to native Bitcoin.
sBTC is more than just a wrapped asset—it’s a fully decentralized, trustless representation of Bitcoin, secured through a unique consensus mechanism that ties directly into Bitcoin’s own security model. By enabling institutions to access sBTC, BitGo is effectively unlocking programmable Bitcoin, allowing it to be used in lending protocols, decentralized exchanges, and other financial applications—without compromising decentralization or security.
“sBTC opens the door to programmable, decentralized financial products without compromising Bitcoin’s core principles — and we’re just getting started,” said Abishek Singh, Product Manager at BitGo. “With over $3 trillion in processed transactions and more than $48 billion in staked assets, BitGo is uniquely positioned to help institutions tap into this new era of Bitcoin utility.”
This institutional validation is a game-changer for Stacks, signaling growing confidence in its technology and long-term viability.
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The Role of STX in the Bitcoin Layer 2 Ecosystem
At the heart of Stacks’ infrastructure is its native token, STX, which plays multiple critical roles:
- Network Security: STX secures the network via a consensus mechanism called Proof-of-Transfer (PoX), where users lock up STX to earn Bitcoin rewards—a rare incentive model that directly ties value back to BTC.
- Smart Contract Execution: Developers use STX to deploy and interact with smart contracts on Bitcoin.
- Transaction Fees: All operations on the Stacks blockchain require STX for gas.
- Governance: STX holders can participate in protocol upgrades and decision-making processes.
Unlike other layer-2 solutions that rely on external security models, Stacks maintains a direct link to Bitcoin’s blockchain through its anchoring mechanism. Every transaction on Stacks is periodically recorded on Bitcoin, ensuring unparalleled security and finality.
Explosive Growth in Stacks DeFi Liquidity
The DeFi ecosystem built on Stacks is experiencing explosive growth. In the first quarter of 2025 alone, the total supply of stablecoins on the network surged by over 400%, rising from approximately $1 million to nearly $7 million. According to data from DefiLlama, this positions Stacks as the third-fastest-growing chain in terms of stablecoin adoption, trailing only Morph and Cronos.
This influx of liquidity reflects growing confidence in sBTC and the broader utility of Bitcoin-powered DeFi. With stablecoins providing the backbone for lending, borrowing, and trading, their rapid adoption indicates that developers and users alike are building and engaging with real financial applications on Stacks.
Moreover, the upcoming activation of sBTC withdrawals on April 30 will further enhance interoperability. Institutions will soon be able to move seamlessly between BTC and sBTC, enabling dynamic capital allocation across both chains while maintaining full custody and security.
Why Institutional Adoption Matters
Institutional involvement is often the tipping point for blockchain ecosystems. While retail interest drives early innovation, institutional capital brings scalability, legitimacy, and long-term sustainability.
BitGo’s support for sBTC means that pension funds, hedge funds, family offices, and other regulated entities can now participate in Stacks-based DeFi with enterprise-grade custody and compliance tools. This removes one of the biggest barriers to entry: security risk.
Additionally, because sBTC is fully backed and decentralized—unlike centralized wrapped BTC variants—investors gain exposure to yield opportunities without counterparty risk.
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Frequently Asked Questions (FAQ)
What is Stacks (STX), and how does it relate to Bitcoin?
Stacks is a layer-2 blockchain that brings smart contract functionality to Bitcoin. It operates alongside Bitcoin, anchoring its transactions to the main chain for security while enabling dApps, DeFi, and NFTs—all powered by its native token, STX.
What is sBTC, and how is it different from wrapped BTC?
sBTC is a decentralized, synthetic version of Bitcoin on the Stacks blockchain, pegged 1:1 to BTC. Unlike wrapped BTC (e.g., WBTC), which relies on centralized custodians, sBTC is minted through a trustless process secured by Bitcoin miners and Stacks validators.
How does BitGo’s integration benefit STX?
BitGo’s support allows institutional investors to access sBTC within a secure custody environment. This increases demand for sBTC, boosts liquidity in Stacks’ DeFi ecosystem, and enhances confidence in STX as a foundational asset for Bitcoin-based applications.
Can I earn Bitcoin by holding STX?
Yes. Through the Proof-of-Transfer (PoX) consensus mechanism, users who lock up (stack) their STX tokens can earn BTC rewards directly—making STX one of the few tokens that offer yield in Bitcoin.
When will sBTC withdrawals be live?
The sBTC withdrawal functionality is scheduled to go live on April 30, 2025, enabling seamless conversion between BTC and sBTC and expanding use cases for institutional capital deployment.
Is Stacks secure compared to other layer-2 networks?
Yes. Stacks derives its security from Bitcoin by anchoring every block commitment to the Bitcoin blockchain. This design ensures that even if the Stacks network were compromised, Bitcoin’s immutability would preserve transaction history and trust.
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Final Thoughts: The Future of Programmable Bitcoin
The surge in STX’s price and the rapid expansion of DeFi on Stacks are not isolated events—they are symptoms of a broader shift. As institutions seek secure, compliant ways to generate yield on Bitcoin holdings, solutions like sBTC and protocols like Stacks are becoming essential infrastructure.
With BitGo’s backing and growing liquidity across lending and trading platforms, Stacks is well-positioned to become the go-to layer-2 for institutional-grade DeFi on Bitcoin. As more developers build on its platform and more users adopt sBTC, the vision of a fully programmable, decentralized financial system rooted in Bitcoin’s security grows ever closer.
For investors and builders alike, now is the time to understand—and engage with—the next evolution of Bitcoin.