Cryptocurrency Market Update: DeFi hits $7 billion in locked funds as Bitcoin bleeds
- 26th August 2020
- Posted by: Hakeem
- Category: CryptoCurrency
- For the first time, the decentralized finance ecosystem hits $7 billion in locked funds.
- Bitcoin price refreshes support at $11,100 after losing traction towards $12,000.
The DeFi ecosystem is on a wild growth path as though on steroids. The projects that offer services such as collateralized loans continue to become popular as investors look for alternative investments from mainstream assets such as Bitcoin and Ethereum.
In a period of less than two months, DeFi has grown by 271% to hit $7 billion for the first time. According to data release by DeFi Pulse, if the growth rate remains intact, the ecosystem could soon hit $27 billion by the end of 2020.
Despite the rocketing growth, only a handful of projects take up the chunk of the $7 billion. For instance, Aave has $1.51 billion of locked funds. It is followed closely by MakerDAO with $1.42 billion while Curve Finance comes third at $1.15 billion. Yearn.finance comes fourth with $845 million followed by Synthetix at $801 billion while Compound has hit $797 billion.
Aave has been made even more attractive to investors after it was given an Electronic Money Institution license by the UK Financial Conduct Authority. Continued growth of the DeFi ecosystem will, however, depend on the ability of the projects to offer long term solutions in the dynamic finance world.
As DeFI rallies, Bitcoin and other major cryptocurrencies stall and bleed. BTC explored levels closer to $11,000 after the price action towards $12,000 lost traction on Monday and Tuesday. At the time of writing, Bitcoin is trading at $11,366. Bulls are facing short term resistance at $11,400 as discussed in the price prediction. The same drab action is observed with Ripple and Ethereum.