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 -2.33% Bitcoin / USD BTCUSD $ 61,034.47
-$1,422.10-2.33% Volume 35.17 b Change -$1,422.10 Open $61,034.47 Circulating 18.85 m Market Cap 1.15 t 7 h Euphoria is Back Ahead of ETF Listings: Bitcoin Hits $63k and Ether Nearly $4k as NYSE Certifies “Approval for Listing” 1 d Green Energy Bitcoin Miner, MintGreen, to Supply Heat to 100 Homes in Canada 1 d Australia's Pension Fund Giant with $69 Billion AUM Is Open to Investing in Crypto
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 -1.10% Ethereum / USD ETHUSD $ 3,836.10
-$42.20-1.10% Volume 16.92 b Change -$42.20 Open $3,836.10 Circulating 117.95 m Market Cap 452.48 b 7 h Euphoria is Back Ahead of ETF Listings: Bitcoin Hits $63k and Ether Nearly $4k as NYSE Certifies “Approval for Listing” 1 d Bitcoin Breaks Through $61,000 as Euphoria & ‘Greed’ Brings the Money Back In 1 d Indexed Finance's NDX Is Down 92% from ATH After $16 Million Hack Sends it Crashing
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 -1.87% Binance Coin / USD BNBUSD $ 466.93
-$8.73-1.87% Volume 1.94 b Change -$8.73 Open $466.93 Circulating 168.14 m Market Cap 78.51 b 3 d China Update: Binance, OKEx, and Gate Kicks Out CNY & Existing Users, WeChat Blocks Searches, Mining Share Goes to Zero 4 d BSC Is Back in the Game as Binance Announces $1 Billion Incentives Program to Pump the Ecosystem 4 d NFT Deposits and Withdrawals are Now Live on FTX US for Institutional Favorite Solana (SOL) OKB -3.11% OKB / USD OKBUSD $ 16.05
-$0.50-3.11% Volume 203.87 m Change -$0.50 Open $16.05 Circulating 60 m Market Cap 963.19 m 2 d CME Bitcoin Futures Open Interest Cracks A New ATH, Ethereum Aims for $4k Again 3 d China Update: Binance, OKEx, and Gate Kicks Out CNY & Existing Users, WeChat Blocks Searches, Mining Share Goes to Zero 1 w Shift to Risk-on: Bitcoin Is Up 12% Already in Uptober Amidst Stock Market Weakness HT 0.80% Huobi Token / USD HTUSD $ 7.66
$0.060.80% Volume 62.83 m Change $0.06 Open $7.66 Circulating 161.08 m Market Cap 1.23 b 2 w DeFi Rallies on China Ban as Chinese Turn to Decentralized Projects, Crypto Prices Recover to Pre-ban Levels 5 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%).
Good activity this weekend with strong reversal yesterday for DeFi tokens, UNI +35% in last 24 hours pic.twitter.com/vpuAKZSx3h
— Coinbase Institutional (@CoinbaseInsto) September 27, 2021
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.
A large number of Chinese users will flood into the DeFi world, and the number of users of MetaMask and dYdX will greatly increase. All Chinese communities are discussing how to learn defi.
— Wu Blockchain (@WuBlockchain) September 26, 2021
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.