Shaurya Malwa · 1 day ago · 2 min read
As has become the norm over recent months, Bitcoin has become all the rage as it has shot higher. On the week, the leading cryptocurrency is up 13 percent, outpacing almost all cryptocurrencies in the top 100 by market capitalization aside from a small number group of coins.
What’s interesting about these coins is that they’re not the DeFi “blue chips” that one may first expect.
In fact, the coins that are outpacing Bitcoin now are 2017-era cryptocurrencies that gained much traction throughout the previous bull market but died off during the so-called “Crypto Winter.”
2017-era altcoins explode higher despite Bitcoin rally
VeChain (VET) is up 15.5 percent in the past 24 hours alone, making it the best-performer aside from Blockstack (STX), which has gained 35 percent over that same time span.
This rally comes in spite of the fact that there has been little news regarding VeChain over the past few days. Of note, VET is going to be added to Coinbase Custody, which may mean that it may get the Coinbase Retail treatment in the future.
Another 2017-era altcoin that is rallying hard is Zilliqa (ZIL), the first blockchain to implement the technology known as sharding.
ZIL is up seven percent today and around 300 percent in the past 30 days alone.
There seems to be a growing amount of traction around the narrative that these blockchains will begin to pose a threat to Ethereum. Ethereum, despite its dominance in DeFi, faces extremely high network congestion during times of price volatility and when new tokens and projects are released.
And finally, Verge (XVG) has gained 15 percent in the past 24 hours, though remains around 97 percent below its all-time high price of close to $0.30.
When will DeFi boom?
The rally in these altcoins relative to Bitcoin and the rest of the cryptocurrency market has stumped investors, especially in the Ethereum and DeFi space.
Hands down, Ethereum has the most vibrant and active community and collection of legitimate use cases. But, in the past seven days, ETH has only undergone a six percent gain, less than half of what BTC gained this past week.
Decentralized finance coins have fared even worse.
Most reputable names in the space such as Yearn.finance (YFI), The Graph (GRT), Compound (COMP), Aave (AAVE), THORChain (RUNE), and more are down by over 10 percent this past week.
Again, this drop comes in spite of the continued usage of these DeFi platforms and continued innovation.
Alex Krüger, an economist in the space, said that he thinks eventually, DeFi coins will garner the attention of institutional investors, which will drive this space to new heights.
Institutional investors will eventually turns their eyes to DeFi.
Not just yet. But it's a matter of when, not if.
Prices will then go up so much, you will all be in disbelief.
— Alex Krüger (@krugermacro) December 27, 2020