- Gold falls at the level of growth of cryptocurrencies.
- DeFi market is growing faster than gold, stocks, and commodities.
- Bitcoin will grow amid the conflict between the US and China.
Bitcoin turned out to be more profitable than gold
The DeFi boom, which began in early summer, spurred the growth of the entire cryptocurrency sector. Cryptocurrencies have outpaced precious metals, stocks, and commodities, according to Bloomberg.
DeFi Coins rise faster than gold
The Bloomberg GalaxyCrypto Index for digital coins is up about 66% in 2020, surpassing the jump in gold by more than 20%, as well as the returns on global stocks, commodities, and bonds. This is reported by Bloomberg.
The main reason for the growth of the cryptocurrency market is due to the surge in the popularity of DeFi projects. Companies operating in the DeFi industry are bringing financial functions to the blockchain. People get access to cryptocurrency loans and borrowings, as well as earn interest on deposits with interest that banks never dreamed of. DeFi’s capitalization reached $9 billion from less than $700 million at the start of the year.
Investor interest in cryptocoins is growing along with the development of the Bitcoin and Ether derivatives market. In particular, the DeFi boom has led to a growth of interest in Ethereum–based contracts.
However, over the past 24 hours, cryptocurrency markets have lost about $ 20 billion of their value. As a result, their capitalization dipped below $ 315 billion at the time of writing, according to TradingView.
The traditional catalyst for the collapse was the bitcoin rate (BTC). It slipped 5% towards $ 10,400, while the coin retains the potential for further decline, which could be realized at the end of the week amid the expiration of futures on the CME. Potentially, it is impossible to exclude the fall of the currency in the region of $ 9,500.
Gold falls to August lows
Gold and silver continue to lose value amid escalating conflict between the United States and China, electoral hype in America, and a possible second wave of coronavirus. Most likely, Bitcoin will also react to this situation with a fall. Following silver, the value of the main precious metal also falls.
Gold proved to be a defensive asset during the crisis, but the lack of support from investors led to a fall in the value of the asset. The price of gold fell to $ 1907 per troy ounce, although in August the price of the precious metal approached a record $ 2046.