As if 2020 didn’t provide enough nail-biting moments, 2021 is shaping up to be quite an interesting year for cryptocurrency. With the price of Bitcoin (BTC) floating around the $35,000 mark, skeptics and pundits are flocking to the streets of social media to celebrate the long-awaited demise of the decentralized economy. Of course, they quite conveniently forgot that the price of Bitcoin has experienced a 533% increase since the third halving happened in May 2020.
Given the number of people claiming the crypto bubble has burst — including former U.S. President Donald Trump — it is almost hard to remember that the price of Bitcoin was hovering between $9,000 and $10,000 a mere 12 months ago.
Since the halving, in fact, decentralized finance (DeFi) has emerged as the most promising sector of the cryptocurrency economy, fueling the adoption of the crypto space. A quick glance at the growth statistics clearly indicates just how much momentum DeFi has generated over the past year. In June 2020, the total value locked (TVL) in DeFi was around $1.05 billion. Today, DeFi boasts more than $104 billion locked-in protocols.
Although DeFi is set to lead the crypto space into the mainstream, DeFi has been challenged to its core over the past two years. While some onlookers may point to the hurdles in March 2020 and May 2021, the fact remains that DeFi is quite resilient and is poised for further growth moving ahead.
Calm in the storm
Despite the frenetic growth of DeFi, the space has experienced two substantial stress tests over the past two years: March 2020 and May 2021. To be clear, these instances challenged the DeFi space in ways it had not previously been challenged. The spread of the global COVID-19 pandemic and the Elon Musk-provoked panic selloff, coupled with the crackdown on China’s Bitcoin miners, culminated in the loss of $1 trillion across the entire crypto…