The combined market cap of USDT, USDC, BUSD, and DIA, now exceeds the Ethereum market capitalization by $3 billion.
ETH currently trades at $1,173, with a 5% increase in the last 24 hours.
According to data from Glassnode, a blockchain metric tracker, the Ethereum (ETH) decentralized finance (DeFi) market underwent a dramatic deleveraging, where over $124 billion in capital disappeared in six weeks. Glassnode made the assertion on June 17 in a research piece titled “The Great DeFi Deleveraging.”
According to them, early warning signs of a decline in ETH usage and network demand manifested after the November 2021 all-time high (ATH) of $4,808. They said there was a decline in on-chain activity and gas fees, which signaled a reduction in DeFi-related transaction activity.
The report stated that the Total Value Locked (TVL) on ETH fell from $205 billion to $81 billion, presenting a 60% fall in six weeks. The rice collapse happened via two significant tranches through May and June.
The first was $94 billion during the implosion of Terraforms Lab’s projects, the Terra LUNA 1.0 and Terra USD (UST). The second was $30 billion as ETH traded below its 2018 ATH of $1,030 in June.
These events put the ETH investor base in historically significant realized losses. The combined market cap of the top four stablecoins, Tether USD (USDT), Circle USD (USDC), Binance USD (BUSD), and the ETH-based USD (DIA), now exceeds the Ethereum market capitalization by $3 billion. Meanwhile, their combined size never reached 50% of the ETH market cap throughout 2021.
Glassnode later noted that though the current de-leveraging in the ETH DeFi ecosystem is a painful process, it will allow the ecosystem to heal and rebuild on firmer foundations.
Over the weekend, ETH touched $880. It currently trades at $1,173, with a 5% increase in the last 24 hours.