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According to Cryptoflows, over 70% of all over $4.3 billion worth of tokenized Bitcoin has been transferred to Ethereum.
This migration highlights the growing trend of using Bitcoin in the Ethereum decentralized finance (DeFi) ecosystem and other exciting areas.
Billions of bitcoins are being tokenized
Of the $5.75 billion BTC exported from Bitcoin, over $1.44 billion ended up on the BNB Smart Chain (BSC), with even more BTC tokens transferred to Avalanche, Fantom, and Solana.
Just like Ethereum, BSC, Avalanche, and other ecosystems where tokenized BTC has found its way, support smart contracts. At the same time, holders can engage in DeFi, possibly earning income.
Bitcoin does not support smart contracts; explaining why some holders tokenize their assets. However, while demand for DeFi appears to be on the rise, based on this BTC outflow to smart contract platforms, Total Value Locked (TVL) and Decentralized Exchange (DEX) volumes have been low and even stagnant.
Data from DefiLlama.com, a DeFi analytics platform, shows that TVL is unchanged at less than $50 billion.
Meanwhile, trading volumes on the DEX have been relatively low in recent months. This phase of declining activity may indicate a temporary slowdown in decentralized trading, reflecting the general trend in cryptocurrency prices in recent months.
With recorded DEX trading volumes of less than $2 billion as of May 17, there has been a marked decline in activity in recent months, especially since early 2022.
In November 2021, at the peak of the last bull cycle, DEX trading volumes averaged over $7 billion.
BTC prices are depressed, but the coin is a safe haven
While users are moving their BTC to smart contract platforms, Bitcoin prices remain under pressure in part due to regulatory decisions around the world, mainly in the US and Europe.
Bitcoin Price May 17 | Source: BTCUSDT on Binance, TradingView
On May 16, the European Union (EU) approved comprehensive cryptocurrency regulations that aim to bring transparency and control to the cryptocurrency industry, address issues such as money laundering and protect investors.
Even in these bearish conditions, Jeff Kendrick, head of digital asset research at Standard Chartered, recently opined that bitcoin prices could rise by as much as 70%, adding $20,000 if the United States defaults on its debt.
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While Kendrick said the likelihood of this default is “an unlikely event with a big impact,” his prediction has generated significant interest in the crypto and bitcoin communities as some are beginning to theorize the potential impact of a global superpower default on their debt obligations. on the wider financial landscape.
Any such event will lead to economic turmoil and the inevitable loss of faith in traditional financial systems, which will most likely push investors towards alternative assets, mainly cryptocurrencies.
Given Bitcoin’s status and safe-haven setup, Kendrick believes the coin could benefit by posting significant gains thereafter.
