Could Current DeFi Rebound be Indicative of Revival in the Broader Market?

The broader digital currency ecosystem has been well-reflected by the volatility that has kept the combined crypto market cap below the $1 trillion benchmark for many weeks now.


The experienced plunge has been an encompassing one, and all ecosystems in the crypto space, including the Decentralized Finance (DeFi) offshoot, have recorded a similar valuation drop. The DeFi ecosystem has slumped from a peak of $165.22 billion as of April 2 to $54.85 billion at the time of writing, with the drop coming off bigger than the slump of the market cap from about $3 trillion to the current value of $931 billion.

Despite the gloomy nature surrounding digital assets at this time, the current DeFi valuation came with a significant 24 hours growth which was pegged at 29.26% at the time of writing, according to data from CoinMarketCap.

The growth of the DeFi subsector is quite unusual, as the combined market cap had a 0.69% growth over the same time frame. 

Coincidence in DeFi Growth and Crypto Slump?

The current growth in the DeFi market can be tagged as an intriguing coincidence as it comes at a time when industry participants are exploring how to invest in Ethereum as it now operates using the Proof-of-Stake (PoS) consensus model.

Among the major DeFi tokens that have added to the bottom line are the biggest gainer, Terra Classic (LUNC), which has climbed 69.85% to $0.0003375. The digital currency, linked to the Terraform Labs startup, collapsed back in May, dropping more than 99% of its value. 

Uniswap (UNI) is also outperforming the market atop a 10.69% growth to $6.29. Reserve Rights and Maker are also amongst the major tokens that have added to the current bullish out of the broader market.

Price and valuations grow when investors inject capital into the ecosystem, and with cash inflows coming into the DeFi world, one may assume that this liquidity injection will soon trickle down to the broader crypto ecosystem. Should this happen this week, it will soon stir a change in the industry’s outlook, characterized by flattening volatility that will usher in stability and, eventually, a good growth trennd.

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Investors Enjoy Growing Enthusiasm & Popularity of Bitcoin: Grayscale’s Study

Grayscale Investments surveyed 1000 U.S. investors recently; the Digital Currency Group (DCG) owned crypto asset manager has revealed the growing enthusiasm and popularity of Bitcoin as an investable asset class. 

Key Takeaways in the Grayscale Survey

Per the survey, more than half of cryptocurrency investors in America, or about 55%, started investing in the space in the past 12 months, showing the demand for Bitcoin has surged within this time frame. According to the report, more than 66% of those who acquired the premier digital currency are still HODLing their bag to date. 

About 91% of those investors who have liquidated their Bitcoin portfolio have done so at a good profit margin. The survey revealed that the growth in Decentralized Finance (DeFi) and its attendant investment innovations and the growth of Non-Fungible Tokens (NFTs) have not deterred the influence of BTC in the broader industry. Grayscale unveiled that Bitcoin still accounts for 46% of the total value of crypto markets, despite this apparent growth.

The presence of government-backed investment products linked to Bitcoin has also been cited as a good catalyst for some investors.

“More than three-quarters (77%) of the U.S. investors said they would be more likely to invest in Bitcoin if an ETF existed,” the survey report reads.

Investors welcomed its first Bitcoin Futures-linked ETF product through ProShares back in October. This has fueled the optimism that with more obvious strides, the Securities and Exchange Commission (SEC) can be convinced to approve the first Bitcoin ETF, as many other market regulators have.

Implications for Grayscale

With solid plans to offer an additional suite of digital assets products to meet investor demand, Grayscale has been sailing against the tides to float a Bitcoin ETF product. Armed through the survey with the knowledge that investors’ interest in a Bitcoin ETF has not waned over the past year, Grayscale can draw an additional motivation to meet the SEC’s demands to permit a functioning, full-fledged BTC ETF.

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Grayscale finds that over 25% of US households surveyed currently own Bitcoin

According to a report published by Grayscale Investments on Monday, more than one-quarter of US investors surveyed (26%) said they already own Bitcoin (BTC). Out of this group of owners, 46% and 44% also jointly held Ethereum (ETH) and Dogecoin (DOGE) in their accounts, respectively. An additional three-quarters of participants (77%) said they would likely gain exposure to Bitcoin through an exchange-traded fund.

The survey featured 1,000 respondents between the ages of 25 and 64. All had at least $10,000 in investable household assets (excluding workplace retirement plans or real estate) and at least $50,000 in household income. Most invest in cryptocurrencies via a trading app or directly through a crypto exchange. Very few invest in Bitcoin through a traditional self-brokerage or industry professionals. In fact, the number of respondents using a financial advisor for crypto exposure fell from 30% in 2020 to just 11% this year.

In terms of investment planning, three times as many investors would consider owning BTC as an investment rather than a currency. Furthermore, over 50% of participants said they perceive Bitcoin as a long-term play that can fit in their overall portfolio strategy. 77% said they purchased BTC within the last 12 months. 91% of respondents are currently in the green regarding their investment.

There were near-universal increases in Bitcoin adoption across all age groups, genders, and education levels. The reported cited being able to invest very low amounts, accessibility at any time, and large sector growth potential as key reasons for its popularity.