The crypto market traded higher by nearly 4% at press time, helped at least in part by softer-than-forecast inflation data that fueled bets the Federal Reserve could pivot to a smaller pace of hikes, a view taken with a grain of salt by market watchers saying officials may still be a long way from achieving their goal.
Traders went risk-on on Wednesday, as cryptocurrencies rose alongside equities. The consumer price index increased 8.5% in July from a year earlier, cooling from the 9.1% June advance that was the largest in four decades. Both the core and overall measures came in below the forecast.
Analysts note that this is overall good news for risky assets. The market is now pricing in a 50 basis point move at the September meeting, with the market responding in kind.
DeFi coins rally
In the lead of the crypto market rebound were major decentralized finance (DeFi) coins, touting double-digit gains over the last 24 hours, per CoinMarketCap data, while outperforming top cryptocurrencies like Bitcoin (BTC) and Ether (ETH). Cryptocurrency lending platform Aave’s native asset, AAVE, was up 12.68% at $109.73. Fantom (FTM) was also posting double-digit gains, up 13.82% at $0.41. This follows partly as Binance launched FTM Locked Staking with up to 18.70% rewards for users.
Decentralized Exchange (DEX) Uniswap’s UNI traded at $9.33, which is a 13.70% gain. Bitcoin, the lead cryptocurrency in terms of market capitalization, traded at $23,968, up 3.63%, while Ethereum (ETH) was changing hands at $1,841, up 8.78%.
Although several DeFi coins such as Chainlink, Lido DAO and the aforementioned were posting gains, it could still be said that the fundamentals remain vastly unchanged.
The total value locked (TVL) in the DeFi protocol was posting a slight uptick (+0.97%) to a record $69.28 billion as of writing, according to DefiLlama data. The total value locked is the number of user funds deposited in DeFi protocols and is one of the most commonly used metrics to assess the sector’s growth.