Analysts have notably raised their price target for Bitcoin (BTC), citing a surge in tech innovation as the main catalyst. However, as Bitcoin sets new benchmarks, the financial ecosystem is closely watching the transformative impact of Layer 2 (L2) solutions on the scalability, security, and decentralization of the cryptocurrency.
L2 Tech to Fuel Bitcoin (BTC) Price Rise
Muneeb Ali, CEO of Trust Machines, played a critical role in promoting L2 technologies for Bitcoin. He is confident that, thanks to their emergence, the solution to scalability problems is on the verge of a revolutionary breakthrough. Moreover, this development aims to improve the efficiency of BTC transactions and represents a strategic move to ensure Bitcoin remains at the forefront of the competitive blockchain industry.
“L2 is developing very quickly. Bitcoin, in turn, is not going to change much. L2s are innovative and open to rapid change. After a while it becomes part of their culture. I see the XYZ ecosystem doing one major update every six months: this would be very beneficial for BTC,” Ali said.
Analysts: Bitcoin is beyond store of value
In addition, the development of the Ordinals protocol, the emergence of BRC-20 tokens, and the improvement of smart contracts using BitVM have made significant contributions to the revival of the free Bitcoin economy. Not only that, the transition from a store of value to a viable ecosystem reflects greater acceptance and use in everyday transactions.
Elastos’ announcement of the creation of the BTC Oracle also marks another milestone in the evolution of BTC. BTC Oracle and BeL2 expand the use of Bitcoin in DeFi protocols and beyond, with an emphasis on decentralization and privacy.
“By giving every EVM-compatible blockchain the ability to run Bitcoin-denominated smart contracts, the industry can unlock the incredible innovation and economic potential of the cryptocurrency ecosystem while being rewarded in BTC,” added Jonathan Hargreaves, Global Head of Business Development and ESG at Elastos.
The market is excited about the tech advancements
The synergy between these technological advances and market response has been overwhelmingly positive. Consequently, Bernstein analysts increased the forecast price of Bitcoin at the end of the year to $90,000. This decision was made in connection with the beginning of a new bull cycle, an active influx of funds into spot ETFs, and the aggressive expansion of miners.
The revised forecast reflects optimism driven by technological leaps in Bitcoin’s infrastructure and demonstrates confidence in the continued value and utility of the flagship cryptocurrency.
“Amid a new Bitcoin bull cycle, persistently strong ETF inflows, aggressive capacity expansion, and record-high dollar miner earnings, we continue to view BTC miner stocks as attractive buys for investors interested in the crypto cycle,” Bernstein analysts wrote.
A bright future for Bitcoin
As developers make significant strides in the development and innovation of Bitcoin technology, the implications for its price become increasingly significant. However, these joint efforts pave the way for a future where BTC will thrive as a cryptocurrency and the backbone of digital finance.
