Bitcoin may soon start to benefit from the same craze that's driving Ethereum prices higher; defi...
As I am sure just about everyone is aware these days, defi is all the craze.
People are using the ethereum network to gain access to all sorts of defi protocols that pay hefty interest rates.
Nevermind the fact that interest rates globally are near zero or negative yet these fly by night crypto projects are seemingly able to pay 8%+ APR like it's nothing... but I am sure that can keep going.
But that is besides the point, the point is that defi is pushing up the price of Ethereum and it soon may also help push up the price of bitcoin in a similar way.
Currently there is roughly $10 billion locked in defi:
(Source: https://defipulse.com/)
That $10 billion is about 10x what was locked in defi a couple months ago...
We've seen this before...
The really interesting thing is that we've seen this same exact dynamic play out before as it relates to ethereum.
Back in 2016/2017 it was the ICO craze...
Where everyone and their dog was rushing to launch their own token.
The majority of these tokens were being launched on the Ethereum network and were driving the price of Ethereum up and up and up.
It eventually went all the up over $1,300 and well you know the rest of the story.
Given how it played out the last time, the current price around $500 may end up being incredibly cheap 12 months from now, we shall see.
Bitcoin could end up seeing something similar if it plays its cards right...
(Source:
)https://twitter.com/QWQiao/status/1300410024632766469
- QWQiao
Enter Wrapped Bitcoin, or wBTC...
What if wBTC were to find a legitimate use case?
If that were to be the case, considering how much money and users it already has, it has potentially to really start pushing the price.
It could benefit from the same type of positive feedback loop that is currently pushing ether higher and higher.
Combine that with the fact that people may not have to sell bitcoin in order to get involved in their favorite defi projects, that takes away some of the selling pressure we are seeing currently.
Right now there is a ton of fast money moving out of bitcoin and into defi, but if bitcoin starts playing in the sandbox too, well much of that money probably stops leaving.
And it appears to be trending in the right direction:
(Source: https://studio.glassnode.com/metrics?a=WBTC&category=Addresses&m=addresses.NewNonZeroCount)
Now we need to get wHIVE in on the action as well!
Stay informed my friends.
-Doc