Coins that power decentralized finance (DeFi) protocols are soaring recently as bitcoin treads water.
While bitcoin grabbed all the headlines early on in the year, it is the rest of the crypto space that is stealing its thunder most recently as Ethereum, the backbone of the smart contracts that define much of the DeFi space, has drastically outperformed...
Source: Bloomberg
That is the highest for ETH relative to BTC since
Source: Bloomberg
In fact, as Bitcoin drifts, Ethereum is up over 17% since Friday...
Source: Bloomberg
Back above the recent highs....
Source: Bloomberg
Making new all-time highs...
Source: Bloomberg
The incredible surge in the price of AAVE (driven as surge in the growth of flash loans) most recently is a good example of what is driving this push into DeFi tokens. As CoinTelegraph notes,
Flash loans allow cryptocurrency holders to collatoralize their portfolio to fund other purchases or new crypto purchases.
The loans also help investors utilize the value in their tokens without the need to sell see them and create a taxable event.
Since launching flash loans less than 12 months ago, more than $1.7 billion have been issued and it’s expected that this figure will increse as the crypto bull market progresses.
Simply put, the crypto market is becoming its own bank.
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