Decentralized finance, known as “DeFi,” has become a fashion in the cryptocurrency industry in recent weeks. Moving financial services to a decentralized platform is seen by many as a disruptive use case.
Data; While Bitcoin has increased by 80% over the past three months, it shows that DeFi tokens have performed even better and have increased by more than 100% over the same time frame. Although DeFi is still in fashion, analysts expect Bitcoin to go on a rally after this crypto market segment has undergone a necessary correction.
How Can Defi Increase Bitcoin (BTC)?
After rising more than 150% from March’s lows, Bitcoin stopped at $ 9,000. Since the beginning of May, the leading cryptocurrency has been changing from $ 8,500 to $ 10,000 and hardly deviates from these levels.
Crypto trader Josh Rager reveals Bitcoin’s momentum deficiency by publishing the chart below.
As shown in the table below, there is a very different story for DeFi tokens that have performed better than Bitcoin in recent weeks. As such, 6 of the 10 best performing cryptocurrencies in the Top 100 in CoinMarketCap ranking are Defi cryptocurrencies. However, this DeFi boom could earn more to Bitcoin.
Defi Fix Can Fund Bitcoin and Ethereum
Kelvin Koh, a partner of the cryptocurrency advisory and investment fund Spartan Group, observed that on June 9, when “small altcoins” reached bubble values by investors, Bitcoin will experience strong capital inflows. Referring to the power of tokens like MKR, LEND, Koh said:
“While BTC is in range, we’ve seen a major reassessment in most of the smaller altcoins (DeFi ones) in the past 4-5 weeks. At some point, the valuation of these changes will begin to appear as balloons, and the capital will flow back to BTC. ”
This idea is based on most small altcoins trading against Bitcoin or Ethereum instead of US dollars. This means that if traders want to get their profits on altcoins, they will need to buy Bitcoin and / or Ethereum.
It seems that the cumulative value of all DeFi tokens now exceeds $ 6.5 billion. The withdrawal of these tokens by 10-20% may correspond to millions of dollars of capital flowing into Bitcoin and Ethereum.