DeFi Tokens Takes It Down Slowly As Bitcoin Surges to $ 23,800, Eminent Investor Says Ethereum Can Ultimately Overcome BTC Market Cap: Report

Decentralized finance tokens (DeFi) took a “slow start” last week compared to Bitcoin (BTC) while crypto and blockchain industry developments strengthened Ethereum (ETH) support, according to a report by OKCoin.

The digital asset exchange notes that DeFi tokens are still lagging behind BTC as the nickname cryptocurrency always peaks at around $ 23,800. While Bitcoin is up 25% in the past week, DeFi’s assets such as AAVE and Yearn.Finance (YFI) are “only” up around 10%, OKCoin confirmed in its latest report.

In the past week, DeFi’s leading decentralized protocols and technology platforms announced updates as Ethereum gained a major institutional backer. Analysts now expect these developments to drive or further promote “macro” growth in the DeFi space, even if there is consolidation in leading DeFi protocols such as YFI Yearn.Finance, Compound’s COMP, and UNI Uniswap in the near term, the report noted. .

As stated in the report:

“Analysts believe this underperformance is due to the size of the BTC rally and potential regulations that could affect DeFi. … The basics of space moved forward this week with notable advances in leading Ethereum scaling solution, Optimism, and new products from the best apps. “

The report also mentioned:

“OKCoin launched Gain, a tool that provides easy access to DeFi protocols, with up to 20% APY on fixed-holdings of Bitcoin (the offer is subject to certain terms and conditions). CME Group will launch the future of ethereum in February 2021. Raoul Pal, Goldman Sachs’ executive officer, said Ethereum could surpass Bitcoin’s market capitalization in the upcoming bull cycle. ”

According to industry experts, when BTC “rallies quickly, it can suck the air out of altcoins” (or all coins except Bitcoin). The report highlighted that this trend was observed in early October and November 2020, where there were some alternative coins that lost value against the USD as Bitcoin increased to $ 12,000, and then passed $ 14,000 (and beyond). This is also “a phenomenon seen in previous bull markets,” the OKCoin report confirmed.

Altcoins is now expected to perform better if Bitcoin enters a consolidation phase, ”the report noted. The OKCoin team explained that “in theory, once Bitcoin starts to consolidate, investors look for related investments that can outperform.” There are also “some fears that US regulation could stop DeFi,” the report added.

The report highlighted:

“There have been rumors circulating about possible legislation from the US Treasury that will require virtual asset service providers (VASPs) to report all withdrawals to [self-custodied crypto] wallets. … there are [also] moves have been made to address the stable presence of Bitcoins in the cryptocurrency market due to fears that these assets act as fuel to the shadow economy. “

The report continued:

“There are concerns that these moves could lead to further pressure on devolved funding applications, which require consumers to access their own (often fixed) funds to function properly. Fund managers and prominent traders in the space have argued that since DeFi tokens are in fact cash flow rights and carry a governance premium, they can arguably move differently than non-cash flow tickets like BTC. ”

Sharing other updates on the crypto market, the report noted that Polkadot, the second-fastest smart contract blockchain platform growing after Ethereum, will soon “gather SushiSwap support” (decentralized or non-addictive crypto token exchange) ).

SushiSwap’s co-founder, “0xMaki,” recently revealed that the exchange would soon “open” on Polkadot.

He stated:

“If you LP’ed at the end of September, you still have 2/3 of your prizes which will be available at 6mo. and you will receive moonSushi when we open on Polkadot. ”

According to the OKCoin report, this appears to be “the first Crypto Twitter has heard of SushiSwap’s intention to go cross-chain.” The report added “there is a good reason why SushiSwap is pursuing Polkadot, though.” He noted that Electric Capital, a developer-focused venture fund, released a report “highlighting that Polkadot has a vibrant developer base second only to Ethereum.” The report also mentioned that the network “claims to have more transactions now than Ethereum did at one point in its life.”