on the crypto
Investors are looking to temporarily shift focus from bitcoin to crypto tokens associated with decentralized finance (DeFi).
A look at DeFi
Over the past week, DeFi-linked tokens like COMP, AAVE, KNC and ZRX have all jumped to new highs. Compound COMP's governance token hit a new high of $ 500, taking YTD earnings to over 40%.
COMP was up 130% last month, according to data provider CryptoCompare. The Oracle Chainlink provider's LINK token is also benefiting from growth on DeFi. The token reached a high of $ 26,98 during Asian market hours, breaking the previous record of $ 25,81 reached on January 25.
AAVE, the DeFi lending protocol token of the same name, also rose to hit a record $ 545 price, according to CryptoCompare. Finally, the Ethereum-based 0x decentralized exchange's ZRX token recorded a price of $ 1,149 early Friday and reached $ 1,67 on Saturday, a gain of nearly 60% on a 24-hour basis. .
The token's value has more than doubled since Wednesday, surpassing the previous record price of $ 0,96 reached in August 2020. Specifically, ZRX's 24-hour volume of $ 1,59 billion is greater than its market cap. of $ 1,38 billion, which is quite unusual.
The breakout to new highs appears to have increased traders' interest in tokens
Most of these coins have made substantial gains in recent days in a potential sign that investors are realizing the earning potential of decentralized exchanges (DEXs) and other DeFi solutions, according to Denis Vinokourov, head of research at prime brokerage with London based Bequant.
DeFi coins seem undervalued when comparing bitcoin's valuation (quotation BTC) with Uniswap, the largest DEX by trading volume. "While Uniswap has a market capitalization of $ 6 billion and an annualized revenue of $ 1,1 billion, the market capitalization of bitcoin or a valuation of $ 700 billion is significantly higher than the annualized [miner] revenue of $ 1,5 billion. $, ”Vinokourov said.
Therefore, DeFi tokens appear to have significant upside potential. William Noble, a market chief technician at Token Metrics, expects such coins to mimic 2017's bitcoin bull run this year. In addition to the rally on DeFi, bitcoin remains mostly flat near $ 37.450 on Friday.
Bitcoin's next moves
However, the most likely path for bitcoin appears to be growth as demand continues to outstrip supply. Technical studies are aligned with the fundamentals. The cryptocurrency has exited the descending curve on the daily chart, indicating the possibility of new record highs above $ 41.900. Market attention could return to bitcoin if the cryptocurrency marks a rapid upward movement.
