3 main reasons why the DeFi sector is booming again

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Data from Messari shows that over the past 30 days, the majority of tokens listed on the site’s DeFi Assets index have grown by more than 20%. A few stars like Maker (MKR) Synthetic (SNX) and SushiSwap (SUSHI) have gained more than 100% during the same period.

DeFi Asset Index. Source: Messari.io

From January 1 to January 9, the decentralized financial sector saw its Total Locked-In Value (TVL) rise from $ 15.678 billion to a record high of $ 23.092 billion and this recovery to a new all-time high came about 4 months after the DeFi bull. the deal came to an abrupt end.

Now that Bitcoin (BTC) and Ether (ETH) have reached multi-year highs, investors are once again looking to the DeFi sector and it is likely that the start of a new bull market, TVL’s surge on The main DeFi platforms and the regular integration of Ethereum alternatives are the main reasons for the current surge.

Bitcoin and Ethereum carry the market higher

The last few months of Bitcoin and Ether price action is undoubtedly having a positive effect on the entire cryptocurrency market. Currently, the combined market capitalization of the two main digital assets is over $ 850 billion, or 80% of the total value of the cryptocurrency market.

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As the price of major cryptocurrencies rises, some investors are looking for ways to maximize their profits and the high stake yields and four-digit returns on investment offered by many small-cap tokens have proven to be an irresistible draw to traders.

Historical data shows that when Bitcoin and Ethereum prices recover altcoins tend to follow and when Bitcoin consolidates into a “ predictable ” range, altcoins and DeFi tokens generally rally. This market dynamic could partly explain the recent surge in DeFi tokens.