DeFi yields are about to surge again. According to Bernstein analysts, this comeback could mark a turning point for crypto investors as well as decentralized finance.
DeFi yields poised to surpass 5% amid falling rates
According to crypto analysts at Bernstein, the crypto market is in a state of turmoil. They are particularly referring to decentralized finance (DeFi) which could outperform traditional money market funds. With the FED considering lowering interest rates, DeFi yields could indeed make a spectacular comeback.
Today, yields on platforms like Aave are already reaching 3.7% to 3.9%. Bernstein's crypto experts even envision a potential to exceed 5%, especially for stablecoins like USDC and USDT. They say these crypto assets could offer more competitive returns than traditional dollar-denominated money market funds.
DeFi Markets Recovery Could Revitalize Cryptoasset Prices
DeFi is currently enjoying a double boost.
- On the one hand, the anticipated drop in rates favors the attractiveness of crypto investments.
- On the other hand, Total Value Locked (TVL) in DeFi Has Doubled since the lows of 2022. It now stands at $77 billion.
According to Bernstein, the DeFi monthly active users increase (which has tripled since its lowest level) shows a gradual return of confidence.
Stablecoins are playing a key role in this recovery. Their capitalization stands at $178 billion, a level similar to that seen during previous market rallies.
In this phase of DeFi recovery, Aave and Ethereum are emerging as major players. The crypto token Aave, in particular, has recorded a 23% increase over the last 30 days.
If Bernstein's predictions prove correct, this could kickstart a bull cycle for decentralized finance and digital assets (including cryptocurrencies).
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