After a sharp drop last summer, DeFi tokens had been in the rearview mirror, especially since Bitcoin, Ether, and other major altcoins caught the market’s attention on the back of impressive gains. However, the past few weeks had been major inflows back into the DeFi sectors and some of the top tokens are now at or near all-time highs.
If some retail traders continue to be focused on the rapidly-rising price of Dogecoin, business leaders like Mark Cuban and investment companies like Grayscale are increasingly attracted by the prospects of the DeFi industry.
Chainlink breaks to new all-time highs
We’ve covered Chainlink in the past as well, last time when the DeFi bubble was bursting. Since then, conditions had changed for the largest DeFi tokens, given the token broke to new all-time highs three weeks ago and since then buyers continue to push valuations higher.
The $20 area was a major key resistance and once broker, a new wave of buying had been unleashed. LINK benefits from its leading market position, currently the 9th largest crypto in the world, with over $10 billion in market capitalization.
Other leading DeFi tokens posting solid gains
Thankfully, the activity in LINK is more widespread. Universal Market Access (UMA) jumped by over 150% to reach a new all-time high, while the decentralized exchange liquidity provider 0x (ZRX) also surged more than 70% to a new high for the year.
DeFi lending platforms such as AAVE, Compound, or Maker, are also near all-time highs, with double-digit gains. Cryptocurrencies had been performing positively the entire week, on the back of solid gains across all traditional asset classes.
Global stock markets ended the week with strong gains, confirming there is still massive appetite for risk due to cheap access to capital and subdued economic activity as the pandemic keeps restrictions in place.
So many different had been hit by COVID-19, leading to a rise in unemployment but also an increased interest in risk assets. Cryptocurrencies are viewed as a hedge against the diminishing purchasing power of fiat money and for the past year investors had been rotating cash back and forth from DeFi to Bitcoin, then to leading altcoins (Ether, LTC, or XRP) and for the past several weeks we’ve seen activity back into DeFi.
Even though the crypto market cap dropped below $1 trillion a few weeks ago, it is now around $1.2 trillion as the altcoins outperformed Bitcoin by a large. BTC seems to be gaining traction as well and that could push the entire market higher at a robust pace.