DeFi analysis: Funds from DeFi market have started flowing back to Bitcoin

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The analysis shows that the summer 2020 party for DeFi market is all over for investors as the sector witnesses a massive sell-off. The recent market data indicates that the Defi Index Futures have collapsed erasing all gains since June 2020.
According to analysis of data on the derivatives exchange FTX, perpetual futures for the DeFi Index have tanked over 60% since the September levels of $3500. This scenario is similar for other platforms and exchanges. The Binance DeFi Index Futures also dropped 70% from its August highs. Since its launch, the Index has been mostly trading negative every week at a loss.
Many experts have been arguing that funds from the DeFi market have started flowing back to Bitcoin. During the period of the DeFi crash, BTC has been consistently hitting new highs. Over the period of last month, the Bitcoin price has increased sharply more than 30%.
Bitcoin is considered as the obvious choice for investors who have cashed out gains during the summer rally in the Defi market. Apart from being a good coin for investment, Bitcoin (BTC) also offers a good cushion against the new macroeconomic backdrop. The cryptocurrency leader has been consolidating its position as a potential hedge and leading against its top-competitor and Gold.

Major DeFi Index Crash in October

DeFi traders suffered major blows during October with some of the top DeFi tokens losing anywhere between 30-50%. Andre Cronje’s Yearn Finance (YFI) was the biggest loser crashing nearly 56% in October. The YFI DeFi token dropped from $24,000 at the start of October to $10,500 by the end of the month.
From its high of $1.27 billion market capitalization in mid-September, the YFI token has lost around $1 billion. Currently, the YFI Defi token market cap is around $312.9 million. Uniswap which created much frenzy by launching its UNI token is the other big loser. The Uniswap (UNI) price fell over 40% in October.
The next three big DeFi market losers include Synthetix Network (SNX), Compound (COMP), and Uma (UMA), each losing 37%, 31%, and 23% respectively.
The only two DeFi that have increased in October are Chainlink (LINK) and REN. The Ren protocol rise is more likely because of its affiliation with tokenized BTC. Currently, the Ren protocol has the second largest number of tokenized BTC. On the other hand, the demand for Chainlink’s oracle service among DEXs is the main reason behind its continued strong performance.

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