In the last weeks DeFi tokens prices have dropped significantly, while Bitcoin prices have risen.
It is possible, however, that the drop in DeFi token prices these days is a consequence of an excessive increase between August and September.
For example, if we analyze the curves of the first ten DeFi tokens, excluding WBTC, RenBTC, and DAI, we can clearly see a peak around mid-August, preceded by a fast and significant growth that started in July, and followed by an equally significant, but slower decline that ended at the end of September.
Chainlink, one of the tokens that drove the escalation of DeFi in August, was worth less than $5 until July, while by mid-August it had dropped to almost $20, before falling back below $8 at the end of September. Now it is back to around $10, which is half as high as it was in August, but twice as high as it was at the beginning of July.
Maker, on the other hand, did not follow this trend, continuing to fluctuate around $500.
Uniswap debuted in the markets at the beginning of September, at about $3.3, and then quickly jumped to $6.3 on September 19 and dropped to $2.6 in early October. Now it is even worth just over $2.
UMA was only worth $2 at the end of July, but it jumped to almost $27 at the beginning of September, before falling back below $6 at the beginning of October.
Compound is an exception, because the peak was at the end of June, $295, and although it was back to $259 on September 1, it was actually a downward trend, down to the current $84.
YFI started out at around $800 at the end of July, and then spiked to almost $42,000 in mid-September, returning to below $10,000 at the end of October.
Synthetix started out at about $1, rose to almost $8 and then fell back to $2.5.
For Bitcoin a different path than DeFi token prices
The Bitcoin price path was different. BTC also grew in August, and fell during the month of September, but in October it recovered with a +30% in 20 days, which led it to score new highs in 2020.
On the contrary, since the beginning of the year, BTC’s price has clearly outperformed traditional assets and indices, with +90.4%, which to date is unmatched by any other asset class. There have been individual stocks that have performed similarly, but no sub-funds.
For example, silver has scored a very good +36.8%, and gold an enviable +25.8%, with the Nasdaq that has surprised with +32.8% while the S&P 500 has disappointed with +4.9%, but nothing compared to bitcoin.
Moreover its correlation rate at 1 year is definitely low compared to any other asset class.
In other words, if in some periods the price trend of BTC has followed that of other asset classes, in the long run it continues to follow its own path, disconnected also, for example, from DeFi tokens.