Bitcoin's Layer-2 Bubble Burst: Most Projects Doomed, Says Muneeb Ali

Bitcoin's Layer-2 Honeymoon Phase May Be Over, Most Projects Expected to Fail, Says Muneeb Ali

More than two-thirds of existing Bitcoin layer-2 projects are likely to cease to exist within the next three years, according to Muneeb Ali, co-founder of Stacks. Ali shared his insights during an interview with Cointelegraph at Consensus 2025, while discussing updates on Stacks.

Stacks recently completed a significant network upgrade, Nakamoto, which enhanced user experience and secured the network with 100% of Bitcoin's hash power. As a result, users enjoy faster confirmations on the Bitcoin L2 while benefiting from the Bitcoin network's inherent security.

Ali noted that the Bitcoin L2 ecosystem is facing challenges, with most projects realizing that the market is highly competitive. He believes that only a small fraction of projects, such as Stacks and Babylon, will continue to build and thrive in the long run. These projects are considered more like "blue chip" investments, which are expected to last for at least five more years.

Ali also expects the market to shift towards Bitcoin as other popular layer-1 chains, such as Ethereum and Solana, decline. He believes that Bitcoin attracts external investments, unlike other projects that compete for the same capital base. Ali predicts that the BTC price will never go below $50,000, as large hedge funds are likely to follow the models and halving patterns based on data from the last 10 years.