Ethereum`s Total Value Locked In DeFi Reaches A New All-Time High

Ethereum, the world’s second-largest crypto to date achieved another milestone, despite the price turbulence in the past week. Currently, there are over 9 million Ethereum tokens, worth around $16.5 billion, locked in decentralized finance (DeFi).

Data from DeFi Pulse shows that 9,2 million Ethereum tokens are put in DeFi apps and protocols, after failing to breach 9 million on several occasions in March. Despite the gains and corrections, ETH locked is increasing at a steady pace, gaining $1 billion in February alone. According to Glassnode, Ethereum locked in DeFi is steadily growing, with an average of 9.6% month-over-month increase over the course of the past three months.

Source: DeFi Pulse

The mechanism of DeFi suggests a certain amount of Ethereum, or another asset to be “locked” as a collateral, or for liquidity mining purposes. A total of 8.3% of Ethereum and the current supply of 115 million ETH tokens is redeployed to DeFi, with a slight decline in the number of wallet addresses holding 100-10,000 Ethereum tokens.

“Many/most of those 100-10,000 $ETH wallets are simply putting their ETH to work in #DeFi,” Chris Cable of FlamingDAO commented.

Interestingly, wallet addresses with over 10,000 ETH are showing a bullish sentiment as owners of those addresses didn’t sell during Ethereum’s price peak of $2,050 from February 20. Whales, exchanges, and institutional funds “aren't showing major signs of budging”, as per data from Santiment.

One of the main reasons for the whales’ accumulation, according to industry analyst Anthony Sassano, is that companies are shifting their sight from Bitcoin towards Ethereum as an investment opportunity and a store of value.

“ETH is slowly but surely being gobbled up by large companies and one company, Meitu, actually owns more ETH than BTC!,” Sassano noted. Chinese app maker Meitu allegedly acquired 15,000 ETH tokens, worth $27 million, in a $40 million cryptocurrency investment deal.

Meanwhile, Bank of America (BoA) has shown its support towards DeFi, as the largest lender in the United States called DeFi to be “potentially more disruptive than Bitcoin” in a report. However, its significance and market share are still weak, comparing DeFi with mainstream finance capital markets.

The bank published its “Bitcoin’s Dirty Little Secrets,” on February 17, emphasizing that DeFi may impose a great challenge to banks, insurance companies, and Wall Street.

“Credit creation is one of the key motors of modern finance. As yet, DeFi doesn’t do anything like this,” the report states.