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Bitcoin (BTC) Explodes, DeFi Falls


Yearn Finance (YFI) had surpassed Bitcoin (BTC) in 30 days but that was before! BTC is in great shape while the good days of DeFi seem to be behind it already.

If Bitcoin were to rise even higher, approaching USD 20,000, almost all investors would risk deserting a failing DeFi for a BTC on the road to a new ATH.


Bitcoin takes off, DeFi goes downhill

As the price of Bitcoin continues its upward trajectory - Bitcoin is trading at over USD 14,330 at the time of writing - DeFi's tokens are taking the opposite path.

The co-founder of Markets Science, known as "Bitdealer" on Twitter, shared a chart measuring the correlation between the price of BTC and the price of DeFi's 13 largest tokens over the last 45 days up to November 1, 2020.

Bitcoin shows a negative correlation with 10 DeFi tokens. The price of Aave (AAVE) has no correlation with the BTC. The price of Ether (ETH) is positively correlated with the BTC. A very weak positive correlation exists between the price of UNI and the price of BTC.

7 DeFi tokens are also negatively correlated with Ether, although the DeFi ecosystem is now resting on the shoulders of Ethereum.

DeFi reached its speculative ceiling at the end of August 2020.

DeFi's composite index of Binance has declined 64% from USD 1,100 in early September 2020 to around USD 400 in early November 2020. The DeFi Pulse Index lost nearly 50% of its value.


The BTC is in the process of emptying the DeFi?

Bitcoin experienced a bullish rally in October 2020, with a monthly gain of more than 27%. The bulls were boosted by Square's announcement of BTC's massive purchase and PayPal's announcement of the upcoming launch of its cryptos services.

Google's e-payment engineer, Tyler Reynolds, says that the rising price of Bitcoin is attracting speculative capital from DeFi. According to him, about 50 million USD would have left DeFi.

Even major DeFi players such as Three Arrows Capital and Qiao Wang are now turning to BTC.

Is it necessary to take down Bitcoin to give other cryptos a chance to shine? Bitcoin is decentralized, but it concentrates much of the attention and capital in the cryptosphere.

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