DeFi Token Prices Plummet as Bitcoin Sell-Off Pushed TVL Below $100B
The number of ‘blue crypt' tokens is continually expanding, with new names being added to the DeFi leaderboard. Some of the most talked-about DeFi coins to watch in 2021 are Creator, Compound, Uniswap, Aave, Chainlink, and Ankr.
Matt Hougan, Chief Investment Officer at Bitwise Asset Management, says, “DeFi is the story of 2021,” and it's difficult to disagree.
What Are DeFi Tokens?
DeFi, which stands for digital peer-to-peer financial service technologies, seeks to exclude financial intermediaries and conventional banking services. It provides an option that allows for quicker and less expensive financial transfers with no documentation, no minimum transaction size, and complete audibility and clarity.
Decentralized financial applications often run on blockchains (often the Ethereum blockchain) and mimic existing principles used in finance and banking.
Previously popular DeFi sector tokens have seen their token prices plunge by at least 60% since their previous all-time highs, as the crypto industry as a whole has seen more than $1.2 trillion disappear in less than two weeks.
According to Defi Llama info, the overall value locked (TVL) across all DeFi channels fell from its all-time high of $164.2 billion on May 10 to its current value of $93.34 billion as a result of the pullback.
Reasons Why DeFi Token Prices Plummet?
Newer traders who entered during the latest market adrenaline are now seeing their first major market pullback, which has also resulted in the re-emergence of the most vocal Bitcoin detractors, such as Paul Krugman and Nouriel Roubini.
On the other hand, rapid dip-buying by some of the biggest Bitcoin investors during the recent chaos suggests that, rather than a popped bubble, the market could be in a ‘bubble deflation period,' allowing it to reposition itself after the extraordinary run-up from $3,700 in March 2020 to the all-time high of $64,900 on April 14.
