Altcoin selloff wipes out $4.9 billion in DeFi TVL

Share This Post

The massive selloff on June 17 caused $455 million in liquidations across assets. The effects of the selloff were felt beyond just the altcoin market, with Bitcoin and Ethereum both seeing notable losses in the past 24 hours.

The impact on the DeFi market was particularly pronounced, with the TVL dropping from $104.123 billion to $99.148 billion in a single day. This represents an absolute decrease of $4.975 billion and a percentage drop of around 4.78%.

Out of the top 10 largest chains by TVL, Avalanche saw the most significant drop, losing 5.6% of its TVL. It was followed by Base, which declined 3.79%, and Arbitrum, which fell 3.13%. These losses are part of a broader downward trend that has been unfolding over the past week, affecting almost all major chains.

Name1d Change7d ChangeTVL
Ethereum-3.03%-2.58%$60.787b
Tron-0.36%-1.84%$8.254b
BSC-2.45%-5.51%$5b
Solana-2.33%-7.31%$4.139b
Arbitrum-3.13%-3.75%$2.911b
Blast-2.41%-1.82%$2.053b
Base-3.79%-6.89%$1.582b
Merlin+2.32%+4.68%$1.214b
Polygon-2.82%-5.68%$855.57m
Avalanche-5.60%-11.74%$718.2m

Zooming out to include all chains with a TVL of over $100 million, Thorchain saw the most substantial decrease, with its TVL plummeting by over 29% in just one day. Kava followed with a 12.5% decrease. Smaller and micro-cap chains were not spared, with some experiencing losses exceeding 60%, likely due to a surge in airdrop activities — which often lead to short-term sell pressure.

The sharp decline in TVL across DeFi protocols has several implications for the broader DeFi market. On the positive side, market corrections like these can help eliminate weaker and unsustainable projects, leading to a healthier ecosystem in the long term.

Major TVL wipeouts could push investors to become more discerning, focusing on protocols with solid fundamentals and a strong user base. Additionally, market corrections can present buying opportunities for long-term investors seeking more DeFi exposure.

However, the negative consequences are abundant and could have a more pronounced impact on the market. A sharp decrease in TVL can erode investor confidence, leading to further sell-offs and exacerbating market declines.

Liquidity within DeFi protocols may diminish, making it more challenging for users to execute trades or withdraw funds without significant slippage. This can lead to a vicious cycle of decreasing TVL and liquidity, further destabilizing the market. Furthermore, as TVL drops, the perceived value and trust in DeFi protocols can wane, which might deter new users from entering the space.

The current decrease in TVL, while not as severe as some past market corrections, is particularly concerning given the size and maturity of the DeFi market today. The introduction of spot Ethereum ETFs will add another layer of complexity, as it will integrate DeFi with more traditional financial instruments, potentially increasing volatility.

Spot ETFs are expected to attract significant institutional investment but also introduce new regulatory and market risks. Fluctuations in DeFi TVL can now have broader implications, affecting not just the crypto-native community but also traditional financial markets starting to interact with DeFi through these new financial products.

Altcoin performance can impact major cryptocurrencies and vice versa, with market sentiment quickly spreading across different assets. The fact that Bitcoin and Ethereum were also affected shows how vulnerable they are to broader market trends. While these fluctuations are not unprecedented, they come at a time when the DeFi market is significantly larger and more integrated with traditional finance.

The post Altcoin selloff wipes out $4.9 billion in DeFi TVL appeared first on CryptoSlate.

Read Entire Article
spot_img
- Advertisement -spot_img

Related Posts

Bitcoin To $10 Million? Experts Predict Explosive Growth By 2035

In a new publication titled The Mustard Seed, Joe Burnett—Director of Market Research at Unchained—outlines a thesis that envisions Bitcoin reaching $10 million per coin by 2035 This inaugural

BSC DEX Volume Surpasses Solana—Will This Benefit BNB Price to Reach $700?

The post BSC DEX Volume Surpasses Solana—Will This Benefit BNB Price to Reach $700 appeared first on Coinpedia Fintech News The crypto markets remained sluggish throughout the weekend without

Ripple News: John Deaton Shuts Down False Claims About XRP in State-Level Payments

The post Ripple News: John Deaton Shuts Down False Claims About XRP in State-Level Payments appeared first on Coinpedia Fintech News Recently, rumors spread that the US SEC had clarified how

Latam Insights: Bolivia’s Crypto Energy Moves and Brazil’s Crypto BRICS Initiative

Welcome to Latam Insights, a compendium of the most relevant crypto and economic news from Latin America over the past week In this week’s edition, dollar scarcity is pushing Bolivia to pay for

Supertrade Launches Proprietary Trading Platform Offering Up to $100K Funding for Global Traders

The post Supertrade Launches Proprietary Trading Platform Offering Up to $100K Funding for Global Traders appeared first on Coinpedia Fintech News Supertrade is a brand-new global prop trading

Ripple Case Nearing End? SEC Sources Hint at Big Shifts for XRP, but Major Hurdle Remains!

The post Ripple Case Nearing End SEC Sources Hint at Big Shifts for XRP, but Major Hurdle Remains! appeared first on Coinpedia Fintech News Andrew, who often discusses crypto, finance, and business