Crypto Market and DeFi Amid Covid-19 Crisis Adversities

A cryptocurrency mania known as decentralised finance (DeFi) has helped to turn digital currencies into this year’s best-performing asset by far.

Increased adoption of decentralised finance, or DeFi, has driven the climb in Ethereum, which appears to be maintaining its platform leadership status in the sector. DeFi ports financial functions onto digital ledgers called blockchains, allowing people to do things like lend or borrow funds and earn interest in a savings-like account without the need of increased blockchain usage. Many DeFi applications are run on the Ethereum blockchain.

DeFi collateral levels have reached $9 billion from less than $700 million at the start of the year, according to Fasset, which operates a blockchain-based marketplace for infrastructure investment.

Aside from DeFi, proponents of digital currencies such as Bitcoin argue they offer a store of value amid concern that huge stimulus injections to counter the pandemic will stoke inflation and weaken the dollar.

Crypto markets have done well during the Covid-19 crisis partly because Bitcoin becomes a “refuge”, like gold, when risks multiply.

Overall, investor interest in cryptocurrencies is broadening as derivatives to maximize their returns. But the current situation illustrates what is already known about DeFi: it is transparent, robust, and flexible. It provides access and options where other markets may not. Hence, we will continue to learn as the world of low-interest rates and quantitative Easing unravels in the current Covid world.

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