DeFi vs Bitcoin bull-run - is it still a profitable investment? (by @toni76)

in LeoFinance2 months ago (edited)

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DeFi vs Bitcoin bull-run - is it still a profitable investment?

guest-authored by @toni76

Bitcoin has a strong tendency to take up a lot of space in the cryptocurrency market. A dominance that very rarely goes below 60%. And which takes up much more space in the minds of investors as soon as its price takes off. This is very clearly the case at the beginning of the year, with a BTC that even animates the discussions of counters on social networks and in the mainstream media. A reality that tends to mask the rest of the market. And in particular DeFi, a real success for summer 2020.

No wonder Bitcoin is taking center stage with its recent crossing of the symbolic $ 40,000 mark. A step that left the entire market in a state of unprecedented shock. And who will have to recover quickly from this hangover to decide which direction to take in the immediate future? The tendency is still hesitation at the time of writing this article.

A beginning of an article which clearly shows what situation the market is in at the moment. Because a few months ago, conversely, it was necessary to talk about DeFi in order to be able to address positive points about Bitcoin. A very clear indication of how fast things are changing in the field. And a need to take stock of what can be considered the biggest financial market in the cryptocurrency universe.

DeFi explodes (again)

And it is not because we look away that the world from which we withdraw our attention ceases to exist. A rule that DeFi applies perfectly, proving once again the strength of its world of finance 2.0 applied to cryptocurrencies. This by recording a record increase in the total value blocked in its protocols since the beginning of this year.

The latter is effectively above $ 21 billion at the time of writing. Or an explosion of the total value blocked in its protocols (TVL) of more than 30% over a week. And the most important since its creation.

This with a dominance which for the moment always comes back to MakerDAO with a small 19%. Its MKR cryptocurrency has also recorded equally remarkable performance in recent days. With a 100% increase that has simply multiplied its price by 2. This currently places it above $ 1070, after a high near $ 1250 that is 30% from a new ATH.

Bitcoin in DeFi

An increase in the TVL of DeFi, which can in part be explained by the presence of the famous wBTCs that shows the same increase as its non-tokenized counterpart and despite a sharp drop in their numbers coinciding with each major step in Bitcoin's current rise. The first time when the resistance of $ 12,000 was passed, then when the $ 20,000 was crossed. The main reason is the desire of their holders to have them available to resell them at the appropriate time.

A quantity that has stabilized and currently represents a stock of 30,000 BTC. That is the equivalent of $ 1.2 billion at the current BTC price. A value that was significantly lower even when it hit 65,000 BTC last October. Because at that time its price was "only" about $ 13,000, which brought the total to $ 845 million

An identical reality for the amount of Ethereum blocked in DeFi. The latter also shows a sharp 30% drop of the amount to reach 6.7 million ETH, or a little more than 8 billion dollars at the current price. Compared to “only” 3.5 billion dollars that accounted for more than 9.7 million ETH in last December.

Current successes of DeFi

But DeFi's good results are also linked to the success of some of its flagship tokens, which had outperformed also Bitcoin in some cases. In addition, there are often returns tied to these tokens that should not be ignored.

Performance of Bitcoin

Performance of LOOM Network

As shown above the performance of the LOOM cryptocurrency from the Loom Network project. It effectively and greatly exceeds the one of BTC, with higher returns over the last 24 hours, the last week, or even the last 14 days.
LOOM has seen its price soar from $ 0.025 to $ 0.052 at the time of writing in only a few days. And you can profit even more by investing in a very interesting staking option.

We find an identical situation for the UNI cryptocurrency of the Uniswap platform, even if the results are less impressive. It still shows a nice + 84% over the last month. This with a price which has doubled in two months to reach $ 6 now.

Performance of UNI

As a final example, the RUNE cryptocurrency from the THORChain project. It has indeed recorded lower price gains than Bitcoin and the other projects presented above ... except for its annual balance sheet. The latter effectively displays an incredible + 1434.5% which leaves one wondering. And a price that rose during that time from $ 0.095 to over $ 1.65 on its recent early week ATH.

Performance of RUNE

This list is obviously not exhaustive. And it does not take into account very interesting projects like AAVE, the new giant YEARN or the MKR presented above. This is just to give an overview of the results of its main tokens, even in the midst of the Bitcoin bull-run. And to understand that other equally attractive profits are possible elsewhere.





Image by @mariosfame

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And another project I learnt today thanks to you: LOOM ! I’ll check it out.
Welcome to the tribe ;)

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Interesting. Bitcoin is becoming more of a rich persons token with institutions buying them so I think Defi probably has more room to grow. It does however come with more risk as your never know if these projects will fail one day. It is nice to know that many of the smaller tokens are being to preform well and that people don't have to just go to Bitcoin.