Silicon Valley will create an Ethereum & DeFi bubble: Analyst

Behind the growth in DeFi are fundamental trends of development and education that is driving mass adoption within the crypto-asset space.

DeFi, a space used by only a few hundred active users at the start of the year, now has tens of thousands of active users that regularly complete financial processes on Ethereum.

DeFi may soon turn into a full-fledged bubble, a crypto analyst recently postulated in reference to the institutional money starting to influence this nascent space.

Beyond a select set of investments by Andreessen Horowitz and Sequoia, Silicon Valley investors and innovators have largely kept out of the DeFi space.

Even many in the crypto space, early adopters of Bitcoin and such, did not see much value in DeFi just months ago.

At the core of DeFi are overcollateralized loans, slow transaction times, and other inefficiencies that may give many little reasons to give this space any attention.

Silicon Valley, as evidenced by movements on Twitter, podcasts, and capital flows, is starting to take notice of DeFi.

For one, legendary venture investor Naval Ravikant recently talked about DeFi on a podcast with Tim Ferris.

Earlier this year, Andreessen Horowitz launched a massive crypto-focused fund that intends on investing heavily in DeFi.

"It seems that Silicon Valley finally discovered DeFi. Relatively to crypto natives, they are characteristically late. They were late with BTC, ETH, and this time DeFi. But if history is any indication, they'll hype it up and create a huge bubble out of it in the coming years."