All eyes have been on Bitcoin over the past few weeks.
Just last week, the coin set a new all-time high on most top exchanges, reaching $19,950 on spot platforms and even surmounting $20,000 in the CME’s Bitcoin futures market.
Further, the coin has seen an influx of institutional support from some of Wall Street’s biggest names. Stanley Druckenmiller, one of the world’s best asset managers, said he supports Bitcoin while a CIO at the world’s largest asset manager Blackrock said he thinks Bitcoin will outlast gold.
DeFi outperforming Bitcoin
— Ceteris Paribus (@ceterispar1bus) December 7, 2020
According to Qiao Wang, a lead at the DeFi Alliance and a former Messari exec, DeFi is strongly outperforming Bitcoin as a result of the lack of liquidity.
He commented last month on why the DeFi space has bounced so strongly from its November lows:
“Recap of what I think happened. The mindshare of every informed alt player was on DeFi. But everyone was too afraid to buy on the way down. A game of chicken. Then everyone piled in on first sign of strength. Today many are still in disbelief. But all mindshare is on DeFi. The liquidity in DeFi is simply not big enough to accommodate all of them. Hence the massive high-volume V-shaped recovery.”
Further, the fundamentals of this space have picked up, with Aave launching its v2 and other teams working and announcing exciting new partnerships and products. For instance, Yearn’s Andre Cronje announced a partnership/merger with the SushiSwap team
Institutions to pick up Ethereum and DeFi
With a growing discrepancy between DeFi and Ethereum and Bitcoin, some think that institutions may soon delve into the DeFi space to find ways to make uncorrelated and higher returns than with Bitcoin.
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