By Joanna Ossinger<\/p>\n
A cryptocurrency mania known as decentralized finance has helped to turn digital currencies into this years best-performing asset by far.<\/p>\n
The Bloomberg Galaxy Crypto Index of digital coins is up about 65% in 2020, exceeding golds jump of more than 20% as well as returns from global stocks, bonds and commodities. A key reason for the move higher is a surge in Ethereum, which accounts for more than a third of the crypto gauges weight.<\/p>\n
Increased adoption of decentralized finance, or DeFi, has driven the climb in Ethereum, which appears to be maintaining its platform leadership status in the sector, said Mike McGlone, a strategist at Bloomberg Intelligence.<\/p>\n
DeFi ports financial functions onto digital ledgers called blockchains, allowing people to do things like lend or borrow funds and earn interest in a savings-like account without the need for traditional intermediaries such as banks. Its growing popularity is part of a wider trend of increased blockchain usage. Many DeFi applications are run on the Ethereum blockchain.<\/p>\n
Crypto markets have done well during the Covid-19 crisis partly because Bitcoin becomes a refuge, like gold, when risks multiply, according to Marc Fleury, chief executive officer of crypto asset management and financial technology firm Two Prime.<\/p>\n
A purely ethereal instrument performs well when the real economy is on pause, he said.<\/p>\n
The Bloomberg Galaxy Crypto Index tumbled 6.4% on Monday as the pandemic hurt sentiment across a number of assets, highlighting the risk of sharp moves. The gauge has retreated more than 20% from an August high.<\/p>\n
Overall, investor interest in cryptocurrencies is broadening as derivatives markets for Bitcoin and Ethereum expand.<\/p>\n
DeFi led to a surge of interest in Ethereum contracts, said Aziz Zainuddin, chief product officer of Fasset, adding retail cryptocurrency users have increasingly turned to derivatives to maximize their returns.<\/p>\n
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Excerpt from: By Joanna Ossinger A cryptocurrency mania known as decentralized finance has helped to turn digital currencies into this years best-performing asset by far. The Bloomberg Galaxy Crypto Index of digital coins is up about 65% in 2020, exceeding golds jump of more than 20% as well as returns from global stocks, bonds and commodities. Continue reading
\nCrypto is beating gold as 2020s top asset so far - Economic Times<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"