DeFi TVL Hits $100B Amidst Bitcoin Pump

The crypto industry is experiencing a surge in demand for Bitcoin, leading to a significant increase in the amount of capital invested in decentralized finance (DeFi) protocols. According to DefiLlama, the total value locked (TVL) in DeFi protocols has reached over $100 billion, with a daily trading volume of more than $10 billion. Although these figures are impressive, they still fall short of the record high of $189 billion reached in November 2021. Currently, the leading protocol is the liquid staking platform Lido, which has $38.7 billion locked on-chain. EigenLayer and AAVE also have significant locked values at $11.5 billion and $10 billion, respectively.

This is the first time in nearly two years that the DeFi TVL has surpassed the $100 billion mark, indicating a positive sentiment in the crypto markets. The launch of spot Bitcoin exchange-traded funds (ETFs) in January appears to be one of the driving factors behind this renewed optimism. Institutional demand for Bitcoin ETFs has reached new heights, pushing the cryptocurrency to all-time highs of over $70,000 on March 8. BitMEX Research reports that Bitcoin ETF assets have surged to $28 billion, excluding Grayscale’s fund, which was converted to an ETF earlier this year.

There are rumors circulating on social media platforms, such as X (formerly Twitter), about OTC trading platforms facing a shortage of Bitcoin and resorting to public exchanges to fulfill client orders. OTC desks primarily serve institutional investors and large-volume traders. The increased trading volume following Bitcoin’s rise above $60,000 has caused outages on centralized crypto exchanges like Binance, Coinbase, Kraken, and Bybit. To accommodate the surge in demand, exchanges like Crypto.com have hired more customer representatives.

Bitcoin’s price gains have also had a ripple effect on meme coins, which have experienced significant surges in value. KORRA, Ribbit (RIBBIT), and PUG AI (PUGAI) have seen rises of 577%, 235%, and 232%, respectively, in the last seven days. Shiba Inu (SHIB) and Pepe (PEPE) have also recorded gains of 168% and 165%, respectively. The market capitalization of meme coins currently stands at $61 billion.

The demand for Bitcoin and the positive sentiment in the crypto industry have driven a significant influx of capital into DeFi protocols, pushing the TVL above $100 billion. The launch of Bitcoin ETFs and the increased institutional investor interest have played a crucial role in boosting market confidence. Challenges such as Bitcoin shortages on OTC platforms and trading outages on exchanges have emerged as a result of this increased demand. The rise of meme coins demonstrates the impact of Bitcoin’s price gains on the broader cryptocurrency market.