Bitcoin, the world’s biggest cryptocurrency, has started to see the correction after it managed to reach the highest price in two years. As is typical, once the correction happens, the altcoins get hit hard. This time, the correction has affected DeFi tokens the most.
Bitcoin itself only saw a 5% drop since its weekend high of just above $14,000. Even so, the rest of the crypto industry came out far more bloodied.
DeFi Tokens See Massive Correction
On Tuesday morning, crypto markets saw double-digit losses across a large swathe of tokens throughout the past 24 hours. It should be noted, however, that corrections are as normal as breathing for the markets, and are actually pretty healthy for the market. It allows for re-accumulation and a small respite before the next market movement.
Even so, there was a remarkable decline when it comes to tokens associated with the decentralized finance (DeFi) space. DeFi coins, in general, had already been in decline since September, as the DeFi bubble slowly started to deflate.
Relatively Small Loss In TVL Compared To Market Cap
As it stands now, the total value locked (TVL) of the DeFi space has taken a hit, with degen farmers pulling back their liquidity in order to join this massive selloff. As a result, the all-time-high TVL of $12.5 billion has retreated back to $11 billion. Even so, this is a lot when you compare it to the token prices, which has seen a massive drop in value.
Messari Crypto highlighted the losses seen by DeFi, describing it as blood being shed. Indeed, double-digit losses had been recorded throughout the day by the bigger names of DeFi.
DeFi blood has been shed 🩸🩸🩸 pic.twitter.com/NmWZJBihNi
— Messari (@MessariCrypto) November 3, 2020
This includes Compound, Curve, Aave, SushiSwap, Yearn Finance, Synthetix, Bancor, Balancer, Uniswap, and Loopring. These protocols had seen their native tokens drop considerably in prices, going from anywhere between 10% to 15% within the past 24 hours.
Some Finer Details
The only DeFi token that has seen significant gains throughout this bloodbath was Hegic. The REP token from Augur had seen a bit of green, as well, mostly thanks to how the prediction markets are heating up as the US election looms.
The crypto industry’s total market camp had seen $15 billion in value vanish in 24 hours, as Coingecko showed. With the selloffs intensifying, the total market cap for the industry has dropped back down to under $400 billion.
Ethereum had not managed to escape the market correction, taking a 6% hit as it dropped back below $375. This comes in spite of the entire protocol taking steps towards the great ETH 2.0 launch. Chainlink, Bitcoin Cash, Cardano, Bitcoin SV, Tezos, and Tron each saw respective losses of around 10%. XRP, in particular, saw a 4.5% correction, going back to under $0.23.