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The DeFi Sector Booms Again as Its TVL Surpasses $100 Billion, Fueled by the Mega Rally of Bitcoin

The capital floods decentralized finance as the crypto market thrives  

The decentralized finance (DeFi) realm has hit a new milestone, with its total value locked (TVL) soaring to $100.1 billion on March 9, a testament to the sector's robust growth and the vibrant sentiment Bitcoin's rally has injected into the crypto ecosystem. Despite this impressive achievement, the current TVL still trails behind the record-high of $189 billion set in November 2021, highlighting the sector's potential for even greater heights.

Bitcoin's resurgence has been a key driver, energizing the entire crypto industry and steering the capital on-chain beyond the $100 billion mark. Leading the charge, Lido's liquid staking protocol commands a staggering $38.7 billion in locked value, with EigenLayer's staking ecosystem and Aave's lending protocol not far behind, each securing over $11 billion.

This resurgence marks the first occasion in nearly two years that DeFi's TVL has breached the $100 billion barrier, largely attributed to renewed optimism in the crypto markets following the introduction of spot Bitcoin exchange-traded funds (ETFs) in January. The sector's revival is a clear signal of the growing investor confidence and the catalytic role of Bitcoin in propelling the DeFi landscape to new frontiers.

Institutional interest and Bitcoin's ETF influence

The financial landscape is witnessing a transformative shift with the advent of spot Bitcoin ETFs, catapulting the cryptocurrency to unprecedented heights. 

BitMEX Research reports: 

"The institutional demand for spot Bitcoin ETFs drove the cryptocurrency to new all-time highs this week, topping $70,000 on March 8," 

This surge is underscored by a remarkable accumulation of assets in Bitcoin ETFs, which soared to $28 billion on the same day. It's important to note that this figure excludes assets from Grayscale’s Bitcoin Trust, which transitioned to an ETF earlier this year.

Rumors of over-the-counter (OTC) trading desks exhausting their Bitcoin reserves and turning to public exchanges to meet client demands underscore the intense market activity. This has led to several high-profile crypto exchanges, including Binance and Coinbase, grappling with outages as Bitcoin breached the $60,000 threshold, triggered by a spike in trading volume.

Kris Marszalek, CEO of Crypto.com, highlighted the operational challenges, noting: 

"the exchange hired 480 more customer representatives to handle the surge in demand." 

Memecoins ride the Bitcoin wave

Data from Bitget Research illuminates this trend, revealing: 

"memecoin Korra (KORRA) has seen a 577% rise in the last seven days, followed by a 235% surge for Ribbit (RIBBIT) and a 232% jump for PUG AI (PUGAI) in the same period." 

This explosive growth is not isolated to lesser-known tokens; popular cryptocurrencies like Shiba Inu and Pepe have also enjoyed substantial gains, with increases of 168% and 165%, respectively.

The memecoin market's buoyancy has propelled Dogecoin and SHIB to the forefront, positioning them among the top tokens by market cap, with valuations of $26 billion and $20 billion, respectively. The surge underscores the broadening appeal of memecoins and their increasingly significant role in the digital asset ecosystem, amplified by Bitcoin's market dominance and the resultant spillover effect on alternative cryptocurrencies.