The broader cryptocurrency market has shed over $1 trillion market valuation since the US Feds’ decision on tapering of interest rates in December. Especially primary cryptocurrency Bitcoin has lost approximately 40% of its value over the past couple of months. On the other hand, NFTs and DeFis persisted to remain almost invulnerable to the January market crash.
Despite the crash, NFT marketplaces on Ethereum broke a four-month downward trend in December. Opensea emerged as the top gainer in terms of volumes followed by Magic Eden and Solanart. Interestingly, Opensea sold a whopping 2 million NFTs in December. DeFis TVL which is a proper indication of healthy network growth between users and the platform behaved resistant to the crash.
Total TVL on DeFi has risen by 11% in the second half of December. However, it managed to remain immune for the January crash correcting by 7%. Yet the overall gains are still above 4%. Currently, Ethereum holds $179 billion worth of TVL followed by BSC $17 billion and Avalanche $13 billion.
Bitcoin Versus DeFi Versus NFTs!
Bitcoin has been generating consecutive lower highs over the past couple of months. Yet overall the scenario looks bullish for the flagship asset. However, the BTC price is very close to reach September lows. Its October bull market lasted for only 20 days where it has managed to surge over 40% from $40k to $69k.
Since then it’s been almost over two months the asset is still under correction. Hence, if bulls enter the market we can expect a similar rally up to $70k in the next couple of months. However, as DeFi protocol Terra (LUNA) and NFTs token Decentraland (MANA) outperformed Bitcoin in 2021 Q4. The protocols experienced a prolonged bull market of over 30 days surging by over 100% followed by a decent correction.
Whilst there is so much that is unclear or not properly understood by the mainstream marketplace of how NFTs operate and value, the year might get challenging for them. However, as mainstream use of stablecoin is on the rise, this would further pave the way for DeFi growth in 2022.
Collectively, If NFTs get boring then Bitcoin has to conquer DeFi to rise up to its true potential. Since DeFi protocols are capable of long-lasting bull cycles, the flagship asset may slowly lose its position if traders show no interest. For instance, Terra protocol has undergone a bull market of over 45 days to reach from $40 to $103.3. Where flagship asset gained just 40% profits in 20 days cycle.