After a significant correction through October 2020, the DeFi market has bounced back very strongly once again. Over the last week, the DeFi market has outperformed the overall crypto market in terms of the overall percentage gains. The Defi market cap surged 18.4% over the last week against the overall crypto market gaining 11.4%.
Moreover, a majority of the top-20 DeFi tokens have registered around 2x gains over the top-20 cryptocurrencies in the overall crypto market. Yearn.Finance (YFI) and Aave (AAVE) remain the top DeFi performers with over 100% gains on the 7-day chart.
Both these cryptocurrencies have almost recovered their October month losses, over the last week. Moreover, the Total Value Locked (TVL) in DeFi has also reached an all-time high of above $13 billion as per DeFi Pulse. Uniswap’s continue to dominate the TVL ranks with a 23.12% share.
Apart from YFI and AAVE, some of the other top-performing DeFi tokens are Chainlink (LINK) 29% gains, Uniswap (UNI) 47.5% gains, Synthetix (SNX) 83.6% gains, Uma (UMA) 31.84% gains, and Compound (COMP) 29.57% gains.
Institutional Money Coming to the DeFi Market
On-chain data suggests that there has been a strong institutional entry in the DeFi space. As per the data by Messari, Wall Street giant Jump Trading is holding over $75 million worth of DeFi tokens. This includes some popular DeFi token names like Compound’s COMP, MakerDAO’s MKR, Keep Network’s KEEP, besides others.
In late Oct-early November, Jump Trading accumulated around 47K COMP tokens pouring a massive $5 million in a week’s time. This makes Jump Trading the 8th largest holder of COMP.
Jump Trading holds at least $75m in cryptoassets and is the 8th largest holder of COMP tokens behind a16z and Polychain. Jump bought 47K COMP in the past 7 days!
Jump also holds KEEP, HXRO, NMR, OXT, and MKR.
Jump invested an undisclosed amount in Serum and owns 40m SRM(~$32m) pic.twitter.com/wNML2DZJrW
— Mason Nystrom (@masonnystrom) November 4, 2020
Defiance Capital founder Arthur Cheon also noted that the latest DeFi market reversal is an outcome of “high volumes”. He recently said that not having any exposure to the DeFi market could be one of the biggest mistakes of crypto funds.
Not having any DeFi exposure is the biggest reason for many crypto fund's under-performance this year and it will continue to be the main reason 🙂
— Arthur (@Arthur_0x) November 10, 2020
However, as per the latest reports, the leading crypto-asset venture fund Polychain Capital has purchased a massive amount of Yearn.Finance’s YFI. As per the data by Etherscan, Polychain Capital received 140 YFI tokens amounting to $2.5 million. This comes after Polychain’s previous acquisition of 329 YFI for around $4.6 million.
The latest report from CoinMetrics suggests that DeFi is all for a strong resurgence. It adds:
“Decentralized finance (DeFi) is showing signs of life. After declining over the last few months, yearn.finance (YFI) transaction count hit a new all-time high of 11.3K on November 7th. With ETH pumping, DeFi could be in store for a resurgence, although it remains to be seen whether we will ever return to the days of peak DeFi mania”.