First Mover: Chainlink's Sorry September Returns Shows DeFi Hysteria Deflating

Published on by Coindesk | Published on

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Chainlink, which supplies data feeds to DeFi systems, saw its LINK token fall 42% month to date, the worst return among digital assets in the CoinDesk 20.The DeFi market correction came at a time when traditional markets also were hit hard by growing anxiety over the increasingly contentious U.S. presidential elections in November and resurgent coronavirus cases in the U.S. and Europe, according to Anil Lulla, co-founder of the cryptocurrency research firm Delphi Digital.

The slowing rate of growth in September translated to a sell-off in DeFi tokens.

The DeFi tokens' monthly swings were bigger than for bitcoin, which slid 7.9% in September, after a 2.6% rise in August.

"I don't think anything has fundamentally changed about the story or the investment case. The DeFi market got a little bit ahead of itself and now it's resetting."

CoinDesk's Zack Voell reported Tuesday that some crypto traders are shifting funds from alternative tokens into bitcoin in a bet that the largest cryptocurrency, with a market capitalization of about $200 billion, might prove a better bet over the next several months.

CoinDesk's Omkar Godbole reported that data from the cryptocurrency options markets suggest that ether, the native token of the Ethereum network which serves as the backbone of DeFi, might start to take its cues from bitcoin's price direction.

Bitcoin closed Tuesday at $10,836, setting a record of 65 consecutive daily closes above $10,000, the longest period in history.

The Norwegian crypto research firm Arcane Research also noted that the number of daily active addresses on the Bitcoin blockchain surged last week to its highest level since January 2018."This is a healthy sign and shows that the adoption and use of bitcoin is increasing," the newsletter wrote.

Cryptocurrency analysts are daring to venture into a categorization of bitcoin that would have been unthinkable a few years ago: That historically volatile bitcoin prices now be above $10,000 to stay.

Bitcoin has now had 65 consecutive daily closes above $10,000, a record, and over the past six days the largest cryptocurrency has stayed in a tight range between roughly $10,600 and $10,800.

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