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PERP, DYDX push up crypto market, Bitcoin recovering from bear run

Daniela Kirova
Daniela Kirova
Daniela Kirova
Author:
Daniela Kirova
Writer
Daniela is a writer at Bankless Times, covering the latest news on the cryptocurrency market and blockchain industry. She has over 15 years of experience as a writer, having ghostwritten for several online publications in the financial sector.
January 31st, 2023

Decentralized finance (DeFi) rails are gaining popularity in the wake of China’s crypto crackdown. As Huobi and Binance cut back on China in the wake of the ban, native tokens of leading decentralized trading platforms are surging. Coindesk reported that the PERP token gained 55% in the past 24 hours. PERP facilitates Perpetual Protocol decentralized governance. It is a decentralized exchange (DEX) designed for low slippage levels, shorting, and leverage trading.

DEX-associated coins surge

Coins and tokens associated with Curve, SushiSwap, Uniswap, and other decentralized exchanges have recorded an average increase of 28.5% in the past 24 hours, outdoing Ethereum and Bitcoin by a significant margin. Analysts suggest the crypto market may be pricing an impending trading volume shift to the DeFi rails from centralized exchanges.

DEX activity becoming more dynamic

Naturally, the activity of decentralized exchanges is picking up. For example, derivatives DEX dYdx outperformed the Nasdaq-listed centralized crypto exchange Coinbase by far in the past 24 hours, registering a trading volume of over $4.3 billion compared to Coinbase’s $3.7 billion. Toward the time of writing, Perpetual Protocol had facilitated exchanges for $258 million today. This is up almost tenfold compared to Sunday’s value of just over $16 million.

Chinese journalist Colin Wu predicts Chinese users will bring solid growth to exchanges like dYdX and MetaMask because they will swarm DeFi platforms. On Sunday, he tweeted that all Chinese communities were discussing how to learn DeFi.

Bitcoin overcomes four-week bear run

Bitcoin is finally in a bull run. With reference to large investors, crypto analyst Lark Davis commented:

“Whales bought the China FUD, adding 80,000 bitcoin to their fat stacks.”

According to Blockware Market Intelligence, large investors are buying crypto early on in broader uptrends to make a profit. However, there’s no guarantee the bull run will continue. It all depends on the macro situation. Both the S&P 500 and Bitcoin fell dramatically last week on fears that the Evergrande Group crisis would impact global markets. These fears never materialized.

This isn’t to say China’s property market issues are over even though equities stabilized in the latter half of the week. Daniel Lacalle, chief economist for Tressis SV, commented:  

“The Evergrande collapse only shows a dangerous reality in several Chinese sectors: excessive indebtedness without real income or assets to support it. The hope that the government will fix everything contrasts with the magnitude of the financial hole.”

Contributors

Daniela Kirova
Writer
Daniela is a writer at Bankless Times, covering the latest news on the cryptocurrency market and blockchain industry. She has over 15 years of experience as a writer, having ghostwritten for several online publications in the financial sector.