DeFi Rallies on China Ban as Chinese Turn to Decentralized Projects, Crypto Prices Recover to Pre-ban Levels

China declaring virtual currency-related business activities “illegal” could be a “significant DeFi adoption catalyst” as they turn to decentralized platforms to access crypto.


Last week, China cracked down on crypto and declared virtual currency-related business activities, including the provision of services by overseas exchanges to Chinese residents through the Internet to be “illegal financial activities.”

As we reported, this sent the prices of cryptocurrencies crashing, but that dip was not the one to sell your tokens as historically, it hasn’t turned out well for the sellers.

Crypto assets have already started to recover and are now back at the levels before the crackdown-induced sell-off.

Bitcoin was trading above $45k when the China ban news struck, and we fell to about $40,750. On Sunday, the market started to recoup these losses and went to $44,400, and on Monday are hovering around $44k. BTC 1.40% Bitcoin / USD BTCUSD $ 35,865.48
$502.121.40%
Volume 26 b Change $502.12 Open $35,865.48 Circulating 18.94 m Market Cap 679.23 b
3 w SEC Commissioner says NFTs Might Fall Within Their Jurisdiction, Gensler Hires Senate Aid for Crypto Policy 3 w A Possible Crypto Recovery Moving Into New Year, Risk-on Sentiments Send The Stock Market to Another Record High 3 w Bitcoin and Ether Dump More Going Into Year-End, ETH Killers Showing Great Momentum

Akin to Bitcoin, Ether fell to $2,730 on Friday before climbing to $3,165 on Sunday and is now keeping around $3,100. ETH 2.33% Ethereum / USD ETHUSD $ 2,494.96
$58.132.33%
Volume 16.29 b Change $58.13 Open $2,494.96 Circulating 119.28 m Market Cap 297.61 b
3 w Coinbase Predicts Substantial Growth of Newer L1 Chains & Institutionalization of Regulated DeFi 3 w A Possible Crypto Recovery Moving Into New Year, Risk-on Sentiments Send The Stock Market to Another Record High 3 w The Sandbox Game Is Migrating to Ethereum Sidechain Polygon and Launching A DAO in 2022

The total crypto market is up more than 7% in the past 24 hours and above $2 trillion.

As for exchange tokens that took a big hit, they have recovered as well. After dropping 16%, BNB saw an 8% increase in its value. OKB, which tumbled 42.6% over the period of two days, has rallied 53% since Sunday. Meanwhile, HT fell the hardest by 52%, only to register a 25.5% rise in value. BNB 3.20% BNB / USD BNBUSD $ 376.97
$12.063.20%
Volume 2.75 b Change $12.06 Open $376.97 Circulating 165.12 m Market Cap 62.24 b
1 mon SEC Rejects Another Spot Bitcoin ETF, Binance Announces New System to Remove BNB from Circulation 1 mon BitMEX Launches BMEX Token for Active Users, US Not Eligible for Airdrop 1 mon Crypto Outliers: Terra (LUNA) Amasses $16.9 Bln & Surpass BSC, Avalanche (AVAX) Aims for 1 Million Daily Transactions
OKB 0.32% OKB / USD OKBUSD $ 20.74
$0.070.32%
Volume 48.39 m Change $0.07 Open $20.74 Circulating 60 m Market Cap 1.24 b
3 mon CME Bitcoin Futures Open Interest Cracks A New ATH, Ethereum Aims for $4k Again 3 mon China Update: Binance, OKEx, and Gate Kicks Out CNY & Existing Users, WeChat Blocks Searches, Mining Share Goes to Zero 3 mon Shift to Risk-on: Bitcoin Is Up 12% Already in Uptober Amidst Stock Market Weakness
HT 2.30% Huobi Token / USD HTUSD $ 9.12
$0.212.30%
Volume 86.44 m Change $0.21 Open $9.12 Circulating 156.74 m Market Cap 1.43 b
3 mon Huobi Japan Set to Offer Derivative Following Regulatory Approval 3 mon DeFi Rallies on China Ban as Chinese Turn to Decentralized Projects, Crypto Prices Recover to Pre-ban Levels 8 mon Tech Stocks Dragging Bitcoin, Ether, & Crypto's Down, But 'Fundamentals Still Strong'

However, the star of this recovery was the decentralized finance (DeFi) sector. Earlier last week, DeFi’s market cap was around $103 billion, and today, it is at $123.2 billion.

The biggest contributor to this strong upward movement includes IDEX (37%), PERP (24%), HEGIC (19%), DYDX (16%), RGT (15%), CRV (14%), UNI (11%), and RAY (10%).

The total value locked (TVL) in DeFi has also climbed to $178.4 billion, up from $163 billion early last week and reaching $195.9 billion ATH earlier this month.

With China declaring crypto activities illegal, the Chinese are turning to DeFi to access cryptocurrency projects.

“All DeFi tokens should be rallying hard on the back of the “China ban” news. And along with it, all of the underlying layer 1 and 2s supporting DeFi. As well as NFTs. Anything that is decentralized literally,” noted Spartan Black of crypto fund The Spartan Group.

Similar sentiments are shared by Mathew Graham, CEO of VC firm Sino Global Capital who said on Twitter, “China crypto is basically one big DeFi education seminar these days.”

“In my view the potential for a significant DeFi adoption catalyst is quite considerable,” Graham added.

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