Every day I get Telegrams and emails about DeFi, which a year ago I kept equating with Senator Diane Feinstein. Then this year I bought the Stellar Lumens token after reading day after day about decentralized finance being the one real thing you can do with cryptocurrencies. Only to find out that it’s not really a decentralized finance company, because the coins are supposedly managed by one group.
Here I was thinking I hopped on the DeFi bandwagon on the cheap, and come to find out I am not.
If you’re hearing about DeFi on YouTube ads by old school investors talking about disruption, and hot shot retail traders talking about their 3,000% baggers, the basic fact is that if you want DeFi, and believe in DeFi, then you need a cryptocurrency account.
Until four weeks ago, anyway. The other option for those who want in on the DeFi theme is the new Bitwise Asset Management DeFi Crypto Index fund (BITW) I had never heard of this fund until this week.
“DeFi is the story of 2021,” Matt Hougan, Chief Investment Officer for Bitwise Asset Management, told ETF Trends on February 17.
Decentralized finance (aka DeFi) refers to digital, peer-to-peer financial services technologies that permit crypto trading, loans, interest accounts, and other services. It is reliant on public blockchains like Ethereum and cryptocurrencies.
In the sci-fi world of digital currencies, DeFi creators want to cut out traditional banks and brokers, allowing for the potential to facilitate faster, cheaper, financial transactions, all day every day, with no minimum transaction amounts, no paperwork, full transparency, and auditability.
The growth of the DeFi industry accelerated in 2020, growing from $700 million by December 2019 to $13billion on December 31, 2020. It reportedly hit $40 billion this year, based on industry data across a host of sources and cryptocurrency exchanges.
“We can say DeFi got started around 2013, with the first Initial Coin Offering, called Mastercoin (now Omni),” says Nikita Soshnikov, director of Alphacash Store, a 9-year old cryptocurrency exchange based in Estonia. “They applied a new mechanism of fundraising, very similar to the IPOs. Then a year later, the first stablecoin was created with BitShares (up 400% since December 20). ICOs and stablecoins would eventually play a key role in the growth of decentralized finance,” he says.
I liked this blog post by them: how not…
Read More: www.forbes.com