Bullish sentiment is running high across the cryptocurrency market on Oct. 20 as Bitcoin’s (BTC) surge to a new all-time high at $67,000 thrust the digital asset into uncharted territory, with investors closely watching to see how altcoins and decentralized finance (DeFi) tokens react to the move.
The DeFi sector has also benefited from BTC’s bullish breakout, and today, the total value locked (TVL) across all DeFi protocols climbed to a new record high.
According to data from Defi Llama, which collects data from DeFi protocols across all major blockchain networks, including Binance Smart Chain, Avalanche and wrapped Bitcoin (wBTC), there is now more than $233.88 billion in value locked in protocols across the various blockchain networks. Currently, Aave leads with $18.79 billion, and Curve comes in second place with $17.97 billion locked in value.
As a result of the surging price of Bitcoin, wBTC is now ranked fourth in terms of TVL, with $14.51 billion in value being deployed across the DeFi landscape.
The biggest gainers in TVL over the past seven days were Trader Joe with a 57.2% increase and Rari Capital, which saw a 50.57% surge. Yield Yak also gained 36.52%.
New users flow into DeFi
In addition to the rising token values, the DeFi ecosystem also saw a sharp increase in new user inflow, and data from Dune Analytics shows that 3,591,876 unique wallets have now interacted with at least one DeFi protocol.
Despite the inflow of new users, trading volumes across decentralized exchanges (DEX) have remained below the highs set in May and are currently lower than the activity seen in recent months as well.
One possible explanation for this has been the increased focus on BTC over the past couple of months, as speculation about when a Bitcoin exchange-traded fund would pass and whether or not BTC’s price will have surpassed $100,000 by the end of 2021 dominated conversations.
Stablecoin growth hints at future demand for crypto
Another factor contributing to DeFi’s growth could be the steady integration and infusion of stablecoins.
There has been an interesting history of increases in the circulating supply of Tether (USDT) coinciding in large part with run-ups in the price of Bitcoin, and this most recent rally is no exception because on the same day that BTC established a new all-time high, so to did the circulating supply of USDT.
The importance of stablecoins to the overall DeFi economy is also evidenced by the total value locked on Curve, which specifically deals with the creation of stablecoin pools for use across the ecosystem.
The overall cryptocurrency market capitalization now stands at $2.635 trillion, and Bitcoin’s dominance rate is 47.5%.
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