Ethereum under pressure from DeFI; Can Bitcoin capitalize?

September 19, 2020 | By | Reply | 24 Readers More

2020 saw Ethereum [ETH] briefly take over Bitcoin’s lead in the market. However, this growth was the result of the boom witnessed by the decentralized finance [DeFi] ecosystem.

According to data provided by Skew, the price volatility of Ethereum and Bitcoin are converging. The converging spread of the Ether-Bitcoin 6-month at-the-money [ATM] Implied Volatility had dropped to 7.5%, since the peak observed at 21% on 1 September.

Source: Skew

This was the sign of a retracing Ethereum, as Bitcoin once again took the lead. This was also mainly because of DeFi that had built enormous pressure on the Ethereum blockchain, especially with Uniswap launching its governance token UNI. The launch resulted in the transactions on the blockchain to spike and drove the fees higher than ever. Glassnode’s data suggested that this growing number of transactions and high gas cost resulted in…

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