CRYPTO NEWS

DeFi Total Value Locked (TVL) Declines 35% In One Month To 15-Month Lows

The decentralized finance (DeFi) market has taken a massive hit with the recent crypto market downtrend. The space which had been the breakout star of 2021 had quickly begun losing all of the value accrued during the bull market. This has been a result of major events that have triggered the various crashes. In the past month alone, the DeFi TVL has declined so much that it is now below $100 billion for the first time in more than a year.

DeFi TVL Drops To 15-Month Low

The Total Value Locked (TVL) in the decentralized finance (DeFi) space had grown to a peak of more than $250 billion at its peak last year. It has mostly maintained the majority of this value even through the dips and crashes that would rock the space months after that. However, the low momentum trend of 2022 has also flowed into the DeFi space and this has caused it to lose the large majority of its TVL.

Related Reading | Public Bitcoin Miners Struggle To Keep Up With Difficulty As BTC Production Declines

The total DeFi TVL is currently sitting at $71.35 billion locked across all networks. Given that less than eight months ago, this number was at $250 billion, it has been an alarming decrease. The last time that the TVL had been this low was back in April of 2021 when the space was still picking up steam. This means that the DeFi TVL has dropped more than 68% in the last year alone. 

DeFi TVL

TVL drops 35% in one month | Source: DeFiLlama

The last few months have been especially brutal for the market with it dropping in double-digit percentages. In the last month, the TVL is down 35%, losing more than $30 billion in TVL in the same time period. 

Rise And Fall Of Decentralize Finance

The major pull of the DeFi space had been the fact that it was not under the thumb of any of the banks or financial institutions that currently control the traditional finance market. Given this, users could get services that they usually would not be able to due to their financial buoyancy. The space had grown quickly as this sentiment spread across small and large investors alike.

DeFi market cap chart from TradingView.com

Total market cap drops to $41 billion | Source: DeFi market cap chart from TradingView.com

However, the dissociation from traditional finance meant that DeFi investors were not privy to the security measures that safeguarded investors in traditional finance. This has led to a number of heartbreaking events in the space.

Related Reading | Ethereum Denominated Open Interest Skyrockets As Price Declines

One of these is the decline and eventual collapse of the Terra network, where thousands of crypto investors were left with billions of dollars in losses. Another had been the halting of withdrawals and transfers on the Celsius Network as many await the inevitable liquidation and bankruptcy announcements.

Most of the problems in the space have arisen due to there being no regulations guarding the space. Due to this, it is speculated that the recent market crash will bring with it renewed interest from regulatory bodies whose jobs are to provide safety measures for investors.

Featured image from Financial Times, chart from TradingView.com

Follow Best Owie on Twitter for market insights, updates, and the occasional funny tweet…

Bitcoin Could Climb to $28K by 2022’s End, Deutsche Bank Analysts Suggest

Analysts at Deutsche Bank – Marion Laboure and Galina Pozdnyakova – argued that the cryptocurrency market is “highly fragmented,” and its decline could continue in the near future. However, they believe bitcoin might tap $28,000 by the year’s end, assuming it keeps its close correlation to US stocks. BTC at $28K by Christmas The past::Listen

Analysts at Deutsche Bank – Marion Laboure and Galina Pozdnyakova – argued that the cryptocurrency market is “highly fragmented,” and its decline could continue in the near future. However, they believe bitcoin might tap $28,000 by the year’s end, assuming it keeps its close correlation to US stocks.

BTC at $28K by Christmas

The past several weeks have not been pleasant for the digital asset market as the majority of assets lost a significant chunk of their value. Bitcoin, for one, dropped from over $30,000 to below $20,000 in less than half a month.

The latest people to address the industry’s drawback were Deutsche Bank’s analysts – Marion Laboure and Galina Pozdnyakova. The duo opined that stabilizing prices of a certain digital asset takes time because “there are no common valuation models like those within the public equity system.” They further described the crypto market as a “highly fragmented” niche that could crash even more in the months to come:

“The crypto freefall could continue because of the system’s complexity.”

Nonetheless, Deutsche Bank’s experts outlined that bitcoin’s price charts have been moving quite closely with US stocks. Laboure and Pozdnyakova expect the S&P 500 to reach its January levels by the end of 2022, and they suggested that the primary cryptocurrency could follow suit. If that comes true, BTC could surge to and even beyond $28,000.

Last week, the American billionaire Mark Mobius classified the digital asset as a “measure of investor sentiment,” claiming that bitcoin’s price is a leading indicator that could reveal the upcoming movements of the Dow Jones index:

“Bitcoin goes down, the next day the Dow Jones goes down. That’s the pattern you get. That shows that bitcoin is a leading indicator.”

The Deutsche Bank analysts also gave their two cents on the popular comparison between bitcoin and gold. Unlike many others, they maintained that the crypto asset is not similar to the precious metal but to diamonds:

“By marketing an idea rather than a product, they built a solid foundation for the $72 billion-a-year diamond industry, which they have dominated for the last eighty years. What’s true for diamonds is true for many goods and services, including Bitcoin.”

Any Other Suggestions?

Unlike the aforementioned forecast, Gareth Soloway – President of InTheMoneyStocks – stated that bitcoin could further crash to $10,000 in the following months. His prediction should be taken seriously since he was among the few individuals who outlined a bearish scenario for the asset when it was trading at $50-60,000 last year.

On the other hand, the British cryptographer Adam Back reiterated his position that bitcoin could hit the $100,000 milestone before the end of 2022. Contrary to the analysts from Deutsche Bank, he expects the asset to decorrelate from stocks and traditional finance markets.

DeFi Total Value Locked (TVL) Declines 35% In One Month To 15-Month Lows

Shopping cart
There are no products in the cart!
Continue shopping
0