LONDON (Bywire) - Bitcoin has been seeing some stellar performance on the Ethereum network in recent times. Its bull run comes at a time when activity in decentralised finance has dropped back a little, so, are the two linked?
Data from Dune Analytics suggests the Ethereum network has seen the amount of synthetic bitcoin traded rise to $2bn according to a report on the Blockchain News website. This represents almost double the volume when it pushed past the $1bn mark at the start of the month.
Although Bitcoin saw a slight pullback after its bullish momentum over the past few weeks, investors have taken advantage of high yields from decentralised finance DeFi protocols to maximise their funds by swapping synthetic Bitcoins that are compatible with Ethereum for other ERC-20 tokens.
The recent bullish run on bitcoin has seen investors redirect their gaze to what remains by far the biggest cryptocurrency around in terms of market capitalisation. With DeFi tokens taking a plunge, analysts suggest the Daddy of all cryptocurrencies has reasserted its dominance.
According to the Blockchain News report, DeFi’s recent drop owes much to the recent hack which hit Harvest Finances’ DeFi protocol. While a few DeFi Tokens surged, it was short-lived. Since then trading volume has fallen suggesting investors are renewing their interest in the ‘digital gold’ asset of Bitcoin.
A number of major corporates such as PayPal and MicroStrategy have announced significant purchases, and where they lead others to follow. The Bitcoin bulls are back in business with many experts expecting retail investors to show renewed interest with some hinting it could eventually hit a price of $500,000. With markets experiencing enormous and sustained volatility, cryptocurrencies are currently looking for a better bet than gold or oil.
(Written by Tom Cropper, Edited by Klaudia Fior)