The growth of Bitcoin in recent days overshadowed its rivals, especially altcoins. Its adoption as a reserve asset proves its power and superiority over other digital currencies and DeFi tokens.
DeFi tokens suffered a significant loss on their Binance composite index, dropping by 60%, according to the exchange. It is the second consecutive month of problems regarding this index. The data indicate that the fall from its all-time high of USD 1,200 has reached USD 400.
Likewise, Binance says that most of the Decentralized Finance (DeFi) tokens have lost 7/10 of their value. In other cases, the losses in profit of many tokens have been 90% since last September.
Will Bitcoin Maintain the Power that It Showed?
The power that Bitcoin showed in recent days overshadowed all of its rivals. However, there is still uncertainty as to whether the price of the pioneering cryptocurrency will continue to grow or if it will recede as tension decreases in the United States.
Nervousness took hold of the markets given the uncertainty that the US presidential elections brought. Due to their concern about losing their capital, investors strengthened reserve assets, including Bitcoin, thanks to massive purchase.
However, as the political calm returns, the price of Bitcoin could recede. It is too early to predict what will happen, but the crypto universe could be returning to the previous situation.
The price of Bitcoin would be in limbo as investors regain their interest in DeFi tokens. According to a report from Binance, this could be the scenario. If the DeFi Token Index drops by 60%, it is possible to contrast it with the strength of their Total Value Locked (TVL), which is around USD 12.4 billion.
Few Tokens and DApps Are Doing Well in Index
Beyond the power that Bitcoin showed and the fall of DeFi tokens in their Binance composite index, all is not lost for the latter. Eight tokens have shown a neutral correlation with Bitcoin since the 45 days before November 1st.
The same seems to have happened to tokens regarding Ethereum. The report highlights that 7/13 of them showed a negative correlation with the second-largest digital currency. In both cases, the negative behavior in both Bitcoin, and Ethereum “is not a surprise”, considering the end of the DeFi bubble, according to Binance.
Regarding Capitalization
In recent days, Bitcoin has been the protagonist, showing its power not only concerning price. The most popular of digital currencies also did so regarding market capitalization, demonstrating great superiority compared to other cryptocurrencies.
The capitalization of Bitcoin is around USD 286.9 billion. This represents a great dominance, compared to Ethereum’s USD 52 billion and Tether’s USD 17.1 billion, its two closest rivals.
Bitcoin will remain the absolute king if its price and capitalization continue to rise. Furthermore, if the political stability in the United States pushes its price back and investors regain their interest in DeFi tokens, Bitcoin will share its dominance a bit more.
By Alexander Salazar
