North Rock Digital, a leader in digital asset hedge funds, recently made a bold prediction about the altcoin STX (STX). From the statement released At X, the fund highlighted its investment strategy and reasoning that STX is the best altcoin to buy right now.
“When looking for long-term ideas, we target ideas with solid fundamentals, supportive token economics, and significant catalysts for the future. STX has the strongest catalyst path and the greatest opportunity for reassessment in the coming months,” the fund said.
In-Depth Analysis of Stacks’ Outlook
North Rock Digital’s full paper published on Medium goes into detail supporting its positive outlook for STX. “Major developments have brought the initial STX paper into greater focus,” the paper said. (…) Demand for Bitcoin block space has solidified and demand for the products STX is building has increased,” he asserts.
Importantly, the Nakamoto upgrade is scheduled before the Bitcoin halving in April. The upgrade is seen as a pivotal moment for STX, promising dramatic improvements in speed and efficiency, including 5-second block times and support for sBTC, a secure version of wrapped Bitcoin. According to North Rock Digital, these developments bring STX closer to true Bitcoin L2.
The hedge fund also points to the broader context within the Bitcoin ecosystem that favors STX. The growing demand for Bitcoin’s block space, particularly the 50x surge in the network’s average gas fee this year and the development of Ordinals, indicate growing interest in leveraging Bitcoin beyond simple storage of value. These developments, combined with the expected US spot Bitcoin ETF approval, are expected to increase demand for STX products.
Moreover, STX has recently been somewhat overlooking what North Rock Digital sees as a unique investment opportunity. “Despite these positive developments, interest in STX has waned (…) and a unique opportunity has emerged for us,” the paper details. In particular, the Stacks developer team’s progress on the Nakamoto upgrade is progressing well and Mockamoto milestones have already been completed.
The funding also highlights Stacks’ international partnerships and future plans. This includes launching a marketing campaign in Asia and launching a second Nakamoto testnet by January. “Stacks is expanding its presence globally… They will run a marketing campaign to increase awareness of Bitcoin L2 in the first quarter of 2024, focusing on Korea, Singapore, Hong Kong and Dubai,” the fund explains.
The hedge fund said, “Stax is expanding its presence globally,” and “We will conduct a marketing campaign to increase awareness of Bitcoin L2 in the first quarter of 2024, focusing on Korea, Singapore, Hong Kong, and Dubai.” explained. Additionally, the introduction of new Bitcoin L1 tools such as BitVM is seen as an important step toward realizing the true Bitcoin L2 vision without requiring changes to Bitcoin L1.
STX Valuation
In terms of valuation, STX currently appears to be undervalued, especially when compared to other L1/L2 ecosystems. North Rock Digital claims that it expects STX to see a reduced valuation discount compared to other assets as the Nakamoto upgrade and the next BTC halving approaches.
After Nakamoto, STX is expected to support a variety of applications, including high-performance BTC-denominated NFT marketplaces and existing DeFi applications. The potential of these applications combined with STX’s strong BTC-centric community presents a strong case for STX’s future growth.
At press time, STX was near its yearly high and trading at $1.15.
Featured image from Shutterstock, chart from TradingView.com