Daily Crypto Updates (Dec. 17, 2021): L1 Rally
Several L1s Grow in TVL Dominance
As expected, BTC’s “relief rally” lost some of its steam shortly after failing to clear the $50k resistance zone. As a result, BTC is currently trading in a narrow range just below the $48k level. On top of this, many investors have also relocated some of their riskier assets to safer bets in the aftermath of the U.S. Federal Reserve’s announcements with regard to their plans to combat inflation.
In spite of all these, however, the mid to long-term outlook for the crypto space still remains largely bullish. There are several reasons for this.
For one, and based on on-chain data, it is apparent that BTC HODL-ers are still accumulating BTC pretty aggressively. Because of this, several price walls have been established in different ranges to cushion sudden price plunges if they were to happen.
Next, an increasing amount of liquidity has also been flowing into the various decentralized finance (DeFi) ecosystems across several L1 chains. As can be seen from the DeFi TVL chart as displayed above, L1 chains like Solana and Avalanche have been growing very rapidly in terms of their TVL, sucking in nearly all marginal capital looking to deploy on low-cost smart contract chains.
These two networks have also grown quite a bit when it comes to the non-Ethereum DeFi market share. For Avalanche, their non-Ethereum DeFi TVL share is now at 23%, up a whopping 22% from the previous 1% established in March of this year. For Solana, they are now at 25%, up a sizeable 20% from their previous 5% also established back in March of this year.
Winds of Regulatory Change?
The U.S. National Credit Union Administration (NCUA) announced on Thursday that federally insured credit unions can now partner up with crypto providers to buy, sell, and hold various uninsured digital assets. However, the NCUA did also stress that further regulatory guidelines may be rolled out in the future as the crypto space develops.
Kyle Hauptman, vice-chair of the NCUA, stated that this move is a necessary one, as an increasing number of financial institutions are now finding it more essential to address the growing demand for crypto exposure. This move will also likely provide credit unions with a new revenue stream.