According to the latest update, the decentralized finance (Defi) industry has been growing in popularity over the past several months, with the overall value locked in Defi climbing at $265.74 billion. Many investors believe that the trend is sustainable, but some disagree with this. Most analysts have said that it’s just a bubble or a pricing error, and there is no way for it to continue growing in such a huge amount. So far, they have been wrong. Many people called it a bubble and lost millions of dollars of valuable token holdings. Unlike Undercoin though, this trend isn’t expected to stop growing so fast.
This is a huge jump from the $250B that it is at right now. What’s Defi and what’s causing this growth? Well, as most people know already Defi (Decentralized Finance) is all about loans; the main difference with traditional finance is that these loans occur with “crypto-collateral” instead of traditional methods such as real estate, stocks, or land. The true power of Defi comes to light when you start using decentralized exchanges because it allows you to borrow against your crypto-assets without having to sell them first. This has caused an immense boom in the valuation of tokens since investors can take out 100x leveraged short positions on under-valued tokens while being able to keep their assets.
Most investors believe that Defi will surpass $500B in the next 2 months if things keep going like this at this rate. There are many popular opinions on Defi, but most people believe that there is more room for growth. There are three main popular opinions about the future of Defi. The first opinion is that they are just another cryptocurrency, most people have claimed that there are too many cryptocurrencies to keep track of, so it will decline by 50%. Another opinion is that they cannot be counted as currencies because they are not accepted at any stores or businesses yet. The last popular opinion is that they will become more stable in the long run.
The market capitalization of Defi has increased exponentially since its creation on January 1st, 2018. Defi now holds an average price of $494B per coin with a total of 13,849,661 coins circulating around the world.
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