Bitcoin records robust growth but Ethereum leads a broader market charge as DeFi projects continue their booming growth.
After a week of pump and dump schemes shattered crypto and fiat markets, things seem to have settled into a trench of growth across the board.
The global market cap is up by 6.9% according to data company Nomics, with all the projects now worth $1.12 trillion, or 15% of gold’s total market cap.
The fundamental drivers have been both Bitcoin and Ethereum’s performance. Among the two projects, they create 75% of the total market capitalization of all of crypto, so when they have a great day, it seems that everyone else does.
Bitcoin has seen 6.9% gains during the night, as investors seem to be pouring back into the currency after it is middling the start of February. Nomics data suggests trading volume is up to 5% in the past 24 hours.
But the recent outbreak of activity has pushed Bitcoin’s position into the overbought category, with several technical indicators also sliding that way.
Meanwhile, Ethereum continued its hot streak, adding another 10% to its market cap in 24 hours – it is the second straight day of double-digit gains.
It is a run of good fortune that put the project over the $1,500 mark for the first time and managed to stay there to set a new all-time high. The reason: DeFi. Decentralized Finance apps have been on a charge lately, locking up a record $30 billion in smart contracts. A number that has doubled by the start of January.
Fueling that growth had been the big three, Aave, Compound, and Maker, who simultaneously have more than $13 billion locked up a record of $30 billion in smart contracts. All of which use Ethereum, helping drive ETH up to highs never seen before.
Markets bounce back but concerns pile up
Just like crypto, fiat markets hit a very successful moment yesterday as it too moved on from the r/WallStreetBets take over of the markets from last week.
The Dow, S&P 500, and Nasdaq all closed higher by over 1%, with all 11 indicators in the S&P 500 in the green. The good news seems to be a reaction to President Biden’s “productive” talks with Republican senators about the coronavirus stimulus package. Similarly, earning reports from Alphabet and Amazon pushed up tech stocks, with the futures market all up in after-hours trading.
However, the rally in the markets seemed to come at the expense of shares of some of the stocks that had been popularised by r/WallStreetBets investors last week. GameStop halved on Tuesday to $60 per share, and AMC Entertainment sank by more than 40%.
However, while the markets seemed to gain a more stable footing, some are also concerned that there is not a lot of room left for stocks to grow and a correction could be on the cards.
As retail investors still pour into space, and many companies continue being propped up by the US taxpayer, there could be a storm coming soon.
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