The adoption of Bitcoin as a reserve asset amidst the nervousness of the U.S. elections, showed the power of this digital currency.
The growth of the most important of the crypto currencies in recent days overshadowed its rivals, mainly the altcoins. With its adoption as a reserve asset, Bitcoin Rush showed its power and what some call superiority over other digital currencies and DeFi.
The latter suffered a significant loss in its Binance composite index, which fell by 60%, according to the exchange. This is the second consecutive month of problems with this index. According to the data, the fall from its historical maximum of $ 1,200, has reached $ 400.
Likewise, Binance assures that most of the tokens of Decentralized Finance (DeFi), have lost 7/10 of their value. In other cases, the loss of earnings of many tokens has been 90% since last September.
Will the power shown by Bitcoin be maintained?
It’s hard to doubt that the power that Bitcoin showed over the past few days overshadowed all of its rivals. However, it’s still unclear whether the price of Bitcoin will continue to rise or whether it will fall as the tension in the United States drops.
It should be noted, that nervousness took over the markets in the face of the uncertainty brought by the U.S. Presidents. Investors, worried about losing their capitals, strengthened the reserve assets, among them Bitcoin, which caused a significant growth in its value thanks to the massive purchase.
But to the same extent that political calm returns to the United States, the price of Bitcoin could fall. It’s still early to predict if this is what will happen, but if so, the crypto universe could be returning to the previous situation.
It would be the price of Bitcoin in limbo, while interest in DeFi is being revived. According to the already mentioned Binance report, this could be the scenario, taking into account that the fall of the DeFi index of 60% can be contrasted with the strength of its Total Blocked Value (TVL), which is around $12.4 billion US dollars.
Although Bitcoin showed great power over its rivals, the LTV of the DeFi remains solid and a recovery of the DeFi index is expected. Source Defi PulseDespite the fact that Bitcoin showed great power over its rivals, the LTV of the DeFi remains solid and a recovery of the DeFi index is expected. Source: DeFi Pulse
Bitcoin Beats DeFi
A few tokens and DApps go well in the index
Beyond the power that Bitcoin showed and the fall of the DeFi in the Binance composite index, it’s that for the latter not all is lost. In that sense, 8 tokens stand out, which showed a neutral correlation with respect to Bitcoin from the 45 days prior to November 1st.
The same can be said about the tokens with respect to Ethereum. The report highlights that 7/13 of them showed a negative correlation with the second most important digital currency. In both cases, both in Bitcoin and in Ethereum, the negative behavior „is not a surprise“ considering the end of the DeFi bubble, explains Binance.
As for the applications of the DeFi ecosystem, the Decentralized Exchange (DEX), Uniswap, remains impressive. Of the $12.4 billion of the entire ecosystem, this DEX occupies $2.8 billion in volume, representing 22.66%.
As the US elections draw to a close, how will the markets react?
In terms of capitalization
But going back to the protagonist of the last days, Bitcoin, his power was shown not only in the price. Beyond that, also in market capitalization, the most popular of the digital currencies, he manifested great superiority in comparison with other cryptomontages.
Bitcoin’s market cap stands at $286.9 billion. This represents a colossal dominance when compared to the $52 billion Ethereum and the 17.1 billion Tether, its two closest rivals.
All of these developments leave the way open for two possible scenarios. In the first, Bitcoin remains the absolute king if its price and capitalization continue to rise. In the second case, if political stability in the U.S. drives down its price, and interest in the DeFi is revived, Bitcoin’s dominance would be at least a little more shared.
Regardless of this, it seems pretty clear that crypto currencies and Blockchain are still gaining ground.