Sector Rotation Expected to Boost L2 Assets, According to Kaiko
Kaiko's research indicates that Layer 2 (L2) solutions are gaining traction in the crypto market, particularly following the recent election. Key points include:
- The L2 index has shown upward movement since November.
- The index tracks five L2s: Stacks, Optimism, Arbitrum, Polygon, and Starknet.
- A Galaxy report suggests $47 billion of Bitcoin could transition to L2s by 2030, representing about 2% of Bitcoin's circulating supply.
- Sector rotation may favor L2 assets as institutional interest in Bitcoin increases.
- Regulatory changes, particularly concerning Polygon (MATIC), may influence future growth.
- Analysts anticipate significant growth for L2s in 2025 if regulatory dynamics evolve.
Investors are encouraged to monitor these developments, as potential opportunities beyond Bitcoin may arise.