Cryptocurrency exceeded gold as the most important asset of the year
The obsession with crypto currencies, called decentralized finance (defi), has helped turn digital currencies into the best asset of the year. The Bloomberg Galaxy Digital Coin Encryption 2020 index has risen by almost 66%, an increase of over 20% in gold, as well as returns on global stocks, bonds and commodities. The main reason for the above is an increase in Ethereum, which represents more than a third of the encrypted weight.
Bloomberg Intelligence strategist Mike McGlone said that the growth of decentralized finance or DIFA has led Ethereum to “seek maintain its leadership of the platform.”
DEFI transfers financial services to digital blocks called blockchains, which allow people to do things like borrow money and earn interest on savings accounts without the need for traditional mediators, such as banks. Its growing popularity is part of a broad trend of massive blockchain use. Many DeFi applications work on the Ethereum blockchain.
According to Fussett, who manages the blockchain-based infrastructure investment market, DeFi’s guarantees reached $9 billion, down from $700 million at the beginning of the year.
In addition to DeFi, proponents of digital currencies such as Bitcoin say it offers a valuable deposit due to fears that the massive injection of incentives to combat the epidemic will cause inflation and weaken the dollar.
Cryptographic markets performed well during the Covid-19 crisis, with bitcoin becoming an “asylum,” as gold grows at risk, says Mark Fleury, CEO of the two-cryptocurrency asset management and financial technology companies.
“Pure etheric equipment works well when the real economy is at rest,” he said. There is no doubt that cryptocurrencies have a history of wild fluctuations and are felt only by liquidity. There are also cracks in the perception around Daffy, which suggests that it is not as decentralized as advertising.
The Bloomberg Galaxy Crypto index fell more than 8% on Tuesday in three sessions on Tuesday as the epidemic affected the mood of many assets, highlighting the risk of a sudden move. The meter deviated more than 20% from its height in August.
In general, as the markets for Bitcoin and Ethereum derivatives expand, so does the interest of investors in crypto currencies.
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