More than 70% of all tokenized Bitcoin, worth more than $4.3 billion, is according to facts from Cryptoflows.
This migration highlights a growing trend of using Bitcoin within the Ethereum decentralized finance (DeFi) ecosystem and other areas of interest.
Billions of Bitcoin are being tokenized
Of the $5.75 billion in BTC exported from Bitcoin, more than $1.44 billion made its way to the BNB Smart Chain (BSC) with more BTC tokens flowing to Avalanche, Fantom, and Solana.
Like Ethereum, BSC, Avalanche, and other ecosystems where tokenized BTC found its way, they support smart contracting. In it, holders can engage in DeFi and potentially earn income.
Bitcoin does not support smart contracts; explain why some holders symbolize their assets. While there appears to be growing demand for DeFi, Total Value Locked (TVL) and Decentralized Exchange (DEX) volumes are low and even stagnant.
Data from DefiLlama.com, a DeFi analytics platform, shows that TVL is flat and is less than $50 billion.
Meanwhile, DEX trading volumes were relative low in the past months. This phase of reduced activity could indicate a temporary slowdown in decentralized trading, reflecting the general trend of crypto prices in recent months.
With less than $2 billion in recorded DEX trading volumes as of May 17, there has been a notable downturn in activity over the past few months, especially starting in early 2022.
In November 2021, at the peak of the last bull cycle, DEX trading volumes averaged over $7 billion.
BTC prices suppressed, but coin is a safe haven
As users move their BTC to smart contract platforms, Bitcoin prices continue to be under pressure, in part due to regulatory decisions around the world, primarily in the United States and Europe.
On May 16, the European Union (EU) approved comprehensive crypto regulation that aims to bring transparency and oversight to the crypto industry, addressing issues such as money laundering and investor protection.
Even in this bearish environment, recently Geoff Kendrick, head of digital asset research at Standard Chartered meant that Bitcoin prices could rise as much as 70%, with an addition of $20,000, if the United States defaulted on its debts.
Related Reading: Bitcoin Loses Grip at $27,000 Trading Amid Debt Ceiling Concerns – Details
While Kendrick said the likelihood of this default is a “low probability, high impact event,” his prediction has sparked significant interest within the crypto and Bitcoin communities as some begin to theorize about the potential impact of it in default on the debt obligations of the world power. on the broader financial landscape.
Such an event would lead to economic turmoil and an inevitable loss of confidence in traditional financial systems, which would most likely drive investors to alternative assets, mostly cryptocurrencies.
Given Bitcoin’s status and setup as a safe haven, according to Kendrick, the coin could take advantage of this and then make significant gains.
Feature from Canva, chart from TradingView
