DeFi and the Bitcoin Bull Run Trajectory: CoinGecko Report

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CoinGecko, the world’s leading independent cryptocurrency aggregator, has just released its 2020 yearly cryptocurrency report. In their analysis of the market, CoinGecko highlighted ​that the DeFi sector saw explosive growth as DeFi dominance rose rapidly from 0.9% to 4.6% in the summer. During the same period, the market cap multiplied 12 times to reach $19.6 billion.

Additionally, the DeFi market cap ended the year with a new all-time high at $20.4 billion. Based on the mindshare that the sector has managed to capture, DeFi has the potential to continue growing in the coming years.

Other highlights

Top 30 cryptocurrency market capitalization ended the year with an all-time high of $732 billion

One of the main reasons for this 308% growth is institutional entry into the market. Renowned investors including Paul Tudor Jones and Stanley Druckenmiller have been endorsing cryptocurrencies while large public listed companies such as Microstrategy and Square have been purchasing Bitcoin as part of their corporate treasury. This has led to a boost in crypto market confidence.

The 2020-2021 Bitcoin bull run appears to mimic the 2016-2017 trajectory

The 2016-2017 cycle saw the Bitcoin price grow and peak at 4,527% returns. Meanwhile, in 2020-2021, Bitcoin has risen more than double in the first year against the last cycle (303% versus 130%).

However, the difference this time is that the cryptocurrency market may be able to sustain high valuation largely in part to an influx of institutional adoption, as well as a macro environment that encourages loose monetary policies. Additionally, there is higher accessibility to the market as companies such as PayPal and Revolut now allow retail investors to easily buy cryptocurrencies.

Exchanges’ trading volume grew by $403 billion in 2020

The top nine centralized and decentralized exchanges grew by $403 billion (+307%). While centralized exchanges (CEXs) do account for 93% of the year’s increase, decentralized exchanges (DEXs) still recorded a trading volume of $29 billion in December.

Although DEXs still have a long way to go before flipping the volume of CEXs, they still clocked an impressive 17,989% growth in 2020 alone and is 5.53% of that CEX’s trading volume.

Bitcoin perpetual swap hit $3.5 trillion in volume as Bitcoin reached a new all-time high

The top nine Bitcoin perpetual swap trading volume hit $3.5 trillion (+531%) as the price of Bitcoin reached a new all-time high. ​Huobi has emerged as the surprising contender to ​Binance’s dominance in the arena. Despite its recent launch in 2020, Huobi ended the year commanding 22% of market share.

About CoinGecko

CoinGecko is the world’s leading independent cryptocurrency aggregator. Since 2014, it has been the trusted source of information for millions of cryptocurrency investors. Its mission is to empower the cryptocurrency community with a 360-degree overview of the market. CoinGecko provides comprehensive information derived from thousands of data points such as price, trading volume, market capitalization, developer strength, community statistics and more. It currently tracks more than 6,000 tokens from more than 400 exchanges. For more information, visit ​us here.


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Featured Image: Shutterstock/Ievgenii Meyer/alberto clemares exposito

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