Bitcoin Layer-2 Projects Face Uncertain Future, Says Stacks Co-Founder

According to Cointelegraph, more than two-thirds of existing Bitcoin layer-2 projects may not survive the next three years as initial enthusiasm wanes, stated Muneeb Ali, co-founder of Stacks. Speaking at Consensus 2025, Ali remarked that the "honeymoon phase" for Bitcoin L2s is ending, while providing updates on Stacks' recent developments. Stacks has recently undergone a significant network upgrade named Nakamoto, which has notably enhanced user experience. Ali highlighted that Stacks is now secured by the full Bitcoin hash, offering users faster confirmations while maintaining the security of the Bitcoin network. Discussing the broader Bitcoin L2 ecosystem, Ali noted that many projects are beginning to understand the challenging nature of the market. Ali expressed that not all projects are committed to advancing beyond the initial hype, predicting that less than one-third of Bitcoin projects will endure. However, he mentioned that certain projects, including Stacks and Babylon, are likely to continue thriving. He observed that despite a general suppression in trading volumes and market caps, Stacks has improved its relative position, being perceived as a blue-chip project. Investors often prefer blue-chip projects, which are expected to last at least five more years, to minimize risk. Ali also anticipates a market shift towards Bitcoin (BTC) as other popular layer-1 chains like Ethereum and Solana experience declines. He pointed out that Bitcoin benefits from external capital inflows, such as spot Bitcoin exchange-traded funds (ETFs), while many other projects compete for the same capital base. Ali explained that when trends like memecoins emerge, capital shifts from L1 infrastructure projects to memecoins, but it remains the same capital cycling through different categories. In contrast, Bitcoin is likely the only asset attracting net new buyers. Expressing strong confidence in Bitcoin, Ali predicted that the BTC price will not fall below $50,000, as historical data from the past decade will likely attract large hedge funds to follow established models and halving patterns, creating a "self-fulfilling prophecy."