From Investing.com

September 17, 2024 06:30:27 AM:

Analysts at Bernstein predict a revival in crypto credit markets as the Federal Reserve prepares to cut interest rates. DeFi yields are becoming appealing once again, with Aave offering stablecoin lending yields from 3.7% to 3.9%. Total value locked in DeFi stands at $77 billion, showing signs of recovery and potential growth.

Incentives boosted DeFi yields during the 2020-2021 crypto boom, but unsustainable rates fell as interest rates rose. However, with a new crypto cycle emerging and interest rates turning dovish, DeFi markets are gaining traction again. The supply of fiat-backed stablecoins has reached a record high of $158 billion, indicating a positive trend for the market.

Bernstein notes that Ethereum has underperformed compared to Bitcoin, but sees potential for a turnaround. Rebuilding DeFi lending markets on the Ethereum mainnet could attract larger investors and boost Ethereum’s performance. The analysts emphasize that Ethereum’s growth is driven by the usage of its network, particularly in DeFi markets, making it a promising investment option.

Read more at Investing.com: Renewed interest in DeFi and Ethereum could revive crypto credit market By Investing.com