Bitcoin’s Price Steadies as DeFi Steals the Show – Decrypt

While DeFi draws investors with tales of 1000% annual yields, Bitcoin, the original cryptocurrency and still by far the largest by market capitalization, is finally stable. It has spent most of the month chugging along at $11,000—give or take one hundred dollars. Its current price is $11,075.  

After its plummet from about $12,000 to $10,000 after September 1, Bitcoin’s price stayed buoyant for the rest of the month. It spent the subsequent two weeks waffling between $10,200 to $10,600 before slowly rising to high tide at $11,000.  Since then, the price of the coin has shown steady growth, not dipping below $10,700. 

Meanwhile, DeFi—that’s decentralized finance, the umbrella term for non-custodial financial products known for, among other things, producing crazy-high returns over the past few months—thrashes about in the sand. 

Take newcomer $UNI, decentralized exchange Uniswap’s new token that has doubled in price since its launch on Wednesday, to $6.63. Or $BAL, the governance token of a similar decentralized exchange, Balancer, which fell by 14% overnight to $18.52.

Yet Bitcoin’s relative stability may provide no reason to celebrate. Historically, Bitcoin’s price drops in September. And around this time last year, things started to turn ugly.

Between August 19 and September 28, 2019, Bitcoin’s price stair-stepped its way down from $11,000 to a threshold just above $8,000. Over the remaining months of that year, trading volumes became more volatile. By mid-December, the price had bottomed out at $6,640—a level not seen since the previous bear market. 

Blockchain analysis firm Chainalysis partly attributed last year’s price drop to the multi-billion dollar cryptocurrency scam, PlusToken. It said that the scam’s laundering tactics were a major contributor to Bitcoin’s fourth-quarter sell-off.

It seems that in times of relative global stability, Bitcoin’s price is volatile. This year, while the world burns and its population falls sick to a second wave of the coronavirus pandemic, Bitcoin’s price is stable. Weird.