Bitcoin stalls

Bitcoin's spot price drifted downward on Tuesday, but there's another layer to this story – Stacks, a network working on scaling Bitcoin – and we couldn’t help but notice its native STX has jumped 12.5% overnight.

STX is CoinGecko's 61st-largest asset in terms of its total value. It has rocketed 136.4% in the past 30 days, reaching 64 cents as of 7:49 a.m. (EST), per CoinGecko. The above-sixty-cents mark hasn't been a thing for STX since May of 2022 when crypto markets began to tumble amidst turmoil tied to the Terra ecosystem. The record high for STX is $3.39 reached in late 2021.

"Stacks appears to be enjoying the spotlight with a steady rise in activity," Decrypt said.

What's resonating around the crypto world, all of a sudden, seemingly, is the idea of a data link, or "layer-2," network riding on a tandem bike next to the largest crypto's security layer (layer-1), racing confidently toward a goal of having a way for developers to build applications that, for all intents and purposes, run on the Bitcoin network (via Stacks' separate ledger).

The Stacks bitcoin (sBTC) system has its own miners, and they’re incentivized by STX tokens. But something else, curiously, is stoking the idea of a Bitcoin layer-2 for smart contracts bent on making the biggest-ever blockchain programmable.

Inscriptions, called "ordinals," are a burgeoning niche asset, a kind of tiny digital tattoo for satoshis, the smallest slice of one BTC. Ordinals are considered as being akin to non-fungible tokens (NFTs) on Ethereum.

The rising popularity of ordinals is now "opening up the use case for NFTs and merging them with the Bitcoin security layer," said Matrixport's research chief Markus Thielen.

CoinDesk confirms there is an active community of artists and creators on Stacks; supposedly, some 650,000 Bitcoin NFTs have been minted on Stacks.

"Bitcoin NFT fever;" yep, that is the slightly weird phrase tossed out by DeFi sector analyst CK Cheung.

Stranger still: STX has a formal stamp of approval from the U.S. Securities and Exchange Commission.

Bitcoin fell 1% over the past 24 hours as of Tuesday morning at 8:26 a.m. (EST). Earlier, the largest crypto shot up to $25,200 in a move that could not be sustained as the east coast of the U.S. rose to greet the work week following a three-day weekend. Stock futures were plummeting before the opening bell as of 9:25 a.m. (EST).

Also sharply down is BTC's correlation with stocks.

A repressive macro environment has mostly battered equities so far in 2023, making BTC's 50% YTD gain resemble a pillar of fire on a darkened desert plain.

This stark divergence can be captured using a 40-day correlation between BTC and the S&P 500; the standard deviation reading has slid below 0.3. That's the lowest level since 2021. In May of 2022, the reading stood at 0.8. A reading of 1 implies assets are fluctuating in lockstep; and -1 signifies the opposite.

“Crypto has been decoupling from traditional assets in 2023,” Bloomberg said.

Sales of NFTs skyrocketed at the end of 2021 and into the start of 2022 with multi-billions of dollars' worth of NFT purchases recorded every 30 days, mostly on OpenSea. But then per-month sector-wide tallies took a nosedive in the summer of '22, falling below a half-billion dollars.

After becoming an afterthought as crypto at large confronted a kind of doomsday with the collapse of FTX, the NFT space is now boldly reasserting itself. Growth has returned. But now it's the upstart Blur dominating market share – and rapid-fire NFT trading is suddenly the rage.

In the past week, traders have been "flipping valuable NFTs like they’re DeFi tokens," Decrypt said.

Blur has generated $460 million worth of Ethereum NFT trades over the past seven days, according to data from DappRadar; that's a 361% increase over the previous seven-day period. Meanwhile, OpenSea saw a 12% increase in trading volume to $107 million. A distant third-place marketplace, X2Y2, saw $11 million in trades.

Last week, Blur airdropped $360 million worth of its BLUR governance token to its community of NFT traders who earned rewards through the marketplace, stirring a wave of activity that seems to have enticed some users/collectors, flush with gifted stashes of BLUR, to give the Blur platform a work-out, selling off tokens to snap up in-demand NFTs.

However, as Decrypt explained, some whale-size NFT players, in an effort to boost potential future token reward allocations, appear to be flipping NFTs with greater frequency. And Blur’s marketplace model broadly incentivizes said activity, specifically rewarding traders for using bidding pools that allow for bulk transactions.

MachiBigBrother, a well-known pseudonymous NFT trader, for example, was recently spotted generating $4 million worth of trades connected with NFT land plots in the Yuga Labs' metaverse game Otherside.