USD Value of Crypto Liquidity Locked in DeFi Sector Hits All-Time High of…
This year has seen a lot of surprises in the sector as its previous all-time high of over $12 billion was recorded in October 2020.
Following the recent bull-run of Bitcoin price, the US dollar equivalent of the crypto liquidity found in all the DeFi projects has hit an all-time high of $13.6 billion. Harvest Finance’s TVL has recorded a huge rise of 84% which is double of its rate in the last 24 hours. The percentage change took its US dollar amount from the recorded $473.5 million to $890 million according to the report. This has seen it rise through the ranks of other DeFi projects to cement its position as the 6th highest ranked project.
Ki-Young Ju, the CEO of CryptoQuant, an analytic firm has linked the impeccable performance of the sector to the huge interest of people in risk-free strategies that guarantee high yield. He added that conservative investors will go for DeFi projects instead of putting their coin on other risk-free strategies like arbitrage on the known cryptocurrency exchanges. This caused a lot of the DeFi projects to see high spikes with the likes of ForTube and DFI Money gaining respective 36% and 45% on their various locked up liquidity.
This year has seen a lot of surprises in the sector as its previous all-time high of over $12 billion was recorded at the latter end of October 2020.
Previous Run of DeFi Projects and Possible Causes for Crypto Growth
In its previous $12.5 billion all-time high recorded in the previous month, there was an addition of over $1 billion to the US dollar value of the locked-up liquidity in just 48 hours. There was also a $2 billion increase in the DeFi projects market cap in just 48 hours to send the total Market cap to $14.3 Billion.
According to the DTC Capital Head Spencer Noon, there is another round of bull-run of the DeFi market loading citing the US election as a catalyst. He also pointed out that many yield farmers will switch back to Bitcoin after making fair gains.
In addition to the impact of the US election, the general performance of the cryptocurrency market affected heavily by the recent PayPal news has had a spread over effect on the DeFi coins including Curve, Airswap, Aave, and Synthetix. This has positively reflected in the values of the various DeFi projects. Also, the increase in prices of DeFi tokens used for staking has been the driving force of TVL.
It is highly possible that the bull-run round for the DeFi Projects has not peaked as the Bitcoin price has been tipped to overtake its all-time high of near $20,000. The speculations surrounding the change expected to be accelerated by the post halving event coupled with the various COVID-19 relief packages may be positive news to the cryptocurrency market and possibly drag the DeFi market along.
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