DeFi TVL Tops $233 Billion Following Bitcoin's All-Time High

Bullish sentiment is running high across the cryptocurrency market as Bitcoin surged to an all-time high of $67,000 on Oct. 20, pushing it into uncharted territory, and investors are closely watching how altcoins and DeFi tokens respond to the move.

Crypto Fear and Greed Index Source: Alternative.me

The DeFi space also benefited from a bullish breakout in BTC, with the total value locked (TVL) across all DeFi protocols climbing to a new record high today.

DeFi Llama collects data on DeFi protocols on all major blockchain networks, including Binance Smart Chain (BSC), Avalanche (AVAX), and wrapped Bitcoin (WBTC). According to DeFi Llama, there is now over $233.88 billion in value locked in protocols across blockchain networks. Currently, AAVE leads with $18.79 billion, and Curve is in second place with $17.97 billion in locked value.

Total Value Locked in DeFi Source: DeFi Llama

WBTC now ranks fourth in terms of TVL, with $14.51 billion in value deployed in the DeFi space thanks to the surge in Bitcoin’s price.

Over the past seven days, the biggest TVL gainers have been Trader Joe's and Rari Capital, up 57.2% and 50.57%, respectively. Yield Yak also increased by 36.52%.

Projects with the largest increase in TVL in the past 7 days Source: Token Terminal

New users flood into DeFi

In addition to rising token values, the DeFi ecosystem has seen a sharp increase in new user inflows, with data from Dune Analytics showing that 3,591,876 unique wallets have now interacted with at least one DeFi protocol.

Total DeFi users over time Source: Dune Analytics

Despite the influx of new users, trading volumes on decentralized exchanges (DEXs) are still below the highs set in May and are currently lower than in recent months.

DEX monthly trading volume source: Dune Analytics

One possible explanation is that over the past few months, speculation about when a Bitcoin exchange-traded fund (ETF) will pass and whether the BTC price will break $100,000 by the end of 2021 has dominated the conversation, driving interest in BTC. attention is increasing.

Stablecoin growth hints at future demand for cryptocurrencies

Another factor driving DeFi growth could be the integration and inflow of stablecoins.

In an interesting historical phenomenon, increases in Tether’s circulating supply have largely coincided with increases in Bitcoin’s price, and this latest increase was no exception, as on the same day that BTC hit a new all-time high, USDT’s circulating supply also hit a record high reached a record high.

Tether’s circulating supply has largely had an interesting history alongside bitcoin’s price gains, and this latest rally was no exception, as on the same day BTC hit an all-time high, so did USDT’s circulating supply in this way.

Tether's market cap just passed $70 billion pic.twitter.com/R0gO3Nk2SB

— Chris (@ChrisBTCbull) October 20, 2021

The importance of stablecoins to the entire DeFi economy is also reflected in the total value locked on Curve, which is responsible for creating stablecoin pools for use by the entire ecosystem.

The current total market capitalization of cryptocurrencies is $2.635 trillion, with Bitcoin dominance at 47.5%.

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