Locked Funds Volume Drops 30% from December Peak
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The numbers speak for themselves – TVL now barely reaches $94 billion. And that’s after a precipitous drop from a peak of $137 billion recorded on December 17 of last year. According to data from DefiLlama, the situation looked even sadder last month, with TVL plunging to a critical $88 billion.The market hasn’t seen such a failure in a long time. The amount of funds locked up in DeFi. Source: DefiLlama The Trump effect has evaporated The initial surge in blocked funds in the DeFi sector coincided with a general upswing in the cryptocurrency market following the election of cryptocurrency-centric Donald Trump as president of the U.S. on Nov. 5. Current TVL has actually returned to levels seen during the election, prior to that powerful surge above the $100 billion mark. This drop illustrates how market uncertainty can significantly impact decentralized finance. Both Ethereum and bitcoin have seen a decline in active addresses over the past week, signaling a shift in user confidence amid price corrections, increasing competition from other blockchains, and looming macroeconomic concerns. The Trump-inspired cryptocurrency bull market began to fade as early as the first quarter, when the US president announced sweeping reciprocal tariffs against trading partners. These actions cast a shadow over the positive sentiment surrounding the new administration’s cryptocurrency-focused policies. Macroeconomic storm In addition to tariffs, concerns over persistent inflation in the US and a prolonged pause in rate cuts by the Federal Reserve have added to the negative sentiment of market participants. As a result, bitcoin has fallen to $83,000 from its record high above $108,000 in January, while Ethereum has plummeted from its December high of $4,000 to its current price of $1,800. The future of decentralized finance The downturn in the DeFi sector is directly related to the harsh macroeconomic environment, and the decentralized finance ecosystem itself has not yet…
Filed under: News - @ April 4, 2025 6:24 pm