{"id":103693,"date":"2020-11-03T07:04:23","date_gmt":"2020-11-03T04:04:23","guid":{"rendered":"https:\/\/en.buradabiliyorum.com\/zero-sum-game-defi-declines-while-bitcoin-booms\/"},"modified":"2020-11-03T07:04:23","modified_gmt":"2020-11-03T04:04:23","slug":"zero-sum-game-defi-declines-while-bitcoin-booms","status":"publish","type":"post","link":"https:\/\/buradabiliyorum.com\/en\/zero-sum-game-defi-declines-while-bitcoin-booms\/","title":{"rendered":"# Zero-sum game: DeFi declines while Bitcoin booms"},"content":{"rendered":"

“# Zero-sum game<\/a>: DeFi declines while Bitcoin booms <\/strong>”<\/p>\n

The co-founder of crypto data aggregator Markets Science<\/a>, Twitter<\/a>-user \u2018Bitdealer,\u2019 has shared a chart\u00a0 indicating negative correlations between 11 top DeFi tokens and BTC over the past 45 days to Nov.1, with AAVE showing neutral correlation and UNI showing confluence if less than 0.1.<\/p>\n

Seven of 13 DeFi tokens were also found to have negative correlations with Ethereum (ETH), despite Ethereum powering much of the DeFi ecosystem.<\/p>\n

With many decentralized finance (DeFi) tokens struggling while Bitcoin (BTC) surged in price this week, analysts have identified a longer negative correlation between DeFi tokens and BTC.<\/p>\n

45-day correlation between price performance of BTC and 13 top DeFi tokens: Bitdealer<\/a><\/figcaption><\/figure>\n

However, the sector found its speculative plateau by the end of August, with Binance\u2019s DEFI Composite Index<\/a> crashing 64% from $1,100 at the start of September to less than $400 as of this writing.<\/p>\n

TokenSet\u2019s DeFi Pulse Index (DPI<\/a>) has also shed more than half its value since launching at $130 in mid-September. DPI tokens last traded hands for just $61.55. <\/p>\n

Meanwhile, Bitcoin\u2019s price has increased by more than one-third in the past month, rallying to tag $14,000 at the end of October after global payments giant PayPal announced it was entering the crypto sector.<\/p>\n

Google payments engineer Tyler Reynolds<\/a> believes the bullish action in the Bitcoin markets is drawing speculative capital away from DeFi, noting that \u201cmajor DeFi players\u201d including Three Arrows Capital and Qiao Wang have recently pushed \u201ca narrative of a hard rotation into BTC.\u201d Reynolds estimates up to $50 million may have left the DeFi market, weakening buy-side pressure in the markets.<\/p>\n

Crypto trader Flood made a similar point on the Coinist Podcast saying that he didn’t have “as much exposure as I would’ve liked on this move up and I think that’s a representation of the market as a whole.” <\/p>\n

Trade activity on decentralized exchanges (DEXs) also app<\/a>ears to have reversed, with monthly DEX volume falling from close to $26.3 billion<\/a> in September to roughly $19.4 billion last month.<\/p>\n

Only a handful of DEXs have a significant share of the sector\u2019s volume, with Uniswap and Curve representing 75% of decentralized trade in September. The past three months\u2019 worth of Uniswap volume equates t45% of total DEX volume since November 2019.<\/p>\n

Monthly DEX volume: Dune Analytics<\/a><\/figcaption><\/figure>\n<\/div>\n