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Even after the recent rally, the prices of the best DeFi coins have dropped massively from their summer highs. Data from CoinGecko indicates that the average DeFi coin fell by about 60-70% from its summer highs, massively underperforming Bitcoin.
This is despite the fact that the total value locked in DeFi contracts reached a new all-time high of $ 12.69 billion. Analysts say this is a testament to the long-term value of decentralized finance, especially in a world where returns offered in traditional financial services are close to 0%.
Related Reading: Here’s Why Ethereum’s DeFi Market Could Be Close To Bottom
The total value locked in DeFi reaches a new all-time high
Yesterday, Ethereum data aggregator DeFi Pulse reported that Total Locked Value (TVL) in DeFi contracts has just set a new all-time high at $ 12.69 billion. This is the highest this metric has been since late October, when previous highs of $ 12.43 billion were set.
The latest high set by DeFi’s aggregate TVL comes after the metric entered a consolidation period from mid-September to early November. The collapse in the value of the currencies belonging to this space probably contributed to this trend, as yields were temporarily suppressed.
But with coins like Yearn.finance (YFI), Meta (MTA), Balancer (BAL) and many more rising, the yields have started to rise once again.
As a result, investors with capital on the sidelines are more incentivized to use DeFi contracts.
For example, if Uniswap (UNI) increases by 50%, the returns offered by the platform’s return opportunities are expected to increase by approximately 50%.
Related reading: Tyler Winklevoss: A “tsunami” of capital is coming for Bitcoin
More growth on the way
While recent growth has been impressive, analysts believe DeFi is on the verge of a broader market cycle that will take it beyond summer highs.
Cryptocurrency analyst and former Messari product chief Qiao Wang recently said:
“From an investment perspective, pre-2013 BTC and pre-2015 ETH were unrepeatable asymmetric bets. The pre-2021 DeFi is IMO once in a decade (until proven otherwise). If you missed the first two, don’t miss the second. “
He also recently said he expects Silicon Valley to have a big interest in space in the coming years. He believes this influx of capital and attention will drive the DeFi space parabolically higher due to the capital that many Silicon Valley investors have.
Related reading: 3 Bitcoin chain trends show a macro bull market is in turmoil
Featured Image from Shutterstock Price tags: xbtusd, btcusd, btcusdt Charts from TradingView.com Pivotal Ethereum DeFi Metric Just Hit a New All-Time High
