All eyes turned to Bitcoin in recent weeks. This is as a result of the boom in price of the popular crypto. Last week, the coin hit an all-time high on most major trades. Price reached $19950 on cash platforms and even exceeded $20,000 on the CME Bitcoin Futures market. In addition, btc price has seen an influx of institutional support from some of Wall Street’s biggest names.
However, it is the decentralized coins (DeFi) that have vastly outperformed Bitcoin. According to an analysis by Ceteris Paribus, the average DeFi token has increased by about 54% since October 31. This was almost the lowest in the altcoin market before the recent rally. For the context, Bitcoin increased by 39% over the same period, while Ethereum is up 52.8%.
Ethereum was able to benefit from such trends. This is because ETH2 allows it coins to outperform BTC by a wide margin. The best in the space are SushiSwap (SUSHI), Aave (AAVE), Yearn.finance (YFI), THORChain (RUNE) and Hegic (HEGIC), in that order.
According to Qiao Wang, leader of the DeFi Alliance and former head of Messari, DeFi strongly outperforms Bitcoin because of the lack of liquidity. He commented last month, why the DeFi space has rebounded so strongly since its November lows
Institutions to recover Ethereum and DeFi
In addition, the fundamentals of this space have resumed, with Aave launching its v2 and other teams working and announcing exciting new partnerships and products. For example, Andre Cronje of Yearn announced a partnership/merger with the SushiSwap team.
With a growing gap between DeFi, Ethereum and Bitcoin, some believe that institutions could soon delve into the DeFi space to find ways to generate uncorrelated and higher returns than with Bitcoin. There is, however, the argument that, from a risk management perspective, Bitcoin still has the best risk-reward ratio of any cryptography market.