Bernstein experts expect an accelerated recovery in the DeFi segment amid the growth of Bitcoin and a strong influx of capital into spot ETFs. This is reported by The Block.
The decentralized finance sector was “completely destroyed” during the previous market cycle, analysts said. The latter was characterized by “unsustainable returns” caused by inflationary token reward programs. This model subsequently collapsed.
As a clear example, experts cited the collapse of the Terra ecosystem in May 2022. Before the collapse, the DeFi project Anchor offered a 20% return on the TerraUSD (UST) algorithmic stablecoin involved in the protocol, based on the Luna governance token. As a result of the collapse of the platform, investors lost about $40 billion.
Within the current market cycle, “the returns are real,” experts are confident. According to them, the stability of the segment is given by the key dapps that underlie it, like Uniswap. A DEX-affiliated non-profit organization in February proposed distributing protocol fees among UNI holders. This had a beneficial effect on the rate of the platform’s native token.
“The largest decentralized spot exchange generated $2 billion in trading volume in the last 24 hours—more than 50% of Coinbase’s turnover,” The Block researchers shared their observations.
According to them, Uniswap is the largest DeFi protocol by the value of generated commissions – approximately $3.7 million per day.
Bernstein admits that the leading DEX’s experiment with democratizing monetary policy will serve as an example for other projects.
Experts expressed confidence that regulators will “change their narrative” regarding tokens, which are often attributed to the properties of securities.
“With regulatory clarity going forward, we would not be surprised if global asset managers make a move towards a possible DeFi-ETF,” Bernstein analysts added.
Assets related to decentralized finance occupy 15% of the company’s portfolio. Since the beginning of the year, their cost has also increased by 15%, experts emphasized.
At the time of writing, the total TVL of the DeFi segment is $99.65 billion.
Data: DeFi Call.
At the peak of the previous market cycle, the figure exceeded $180 billion.
Let us remind you that on March 5, the price of Bitcoin updated its historical maximum above $69,000.
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2024-03-05 17:10:00
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