Galaxy Digital Bullish on Bitcoin and Ethereum, Makes Significant Deposits Into DeFi Protocols
Galaxy Digital, a blockchain company, has shown its bullish stance on Bitcoin and Ethereum by investing heavily in these cryptocurrencies. The company recently deposited Wrapped Bitcoin (WBTC) worth $142 million and Ethereum (ETH) worth $28.6 million into decentralized protocols Aave and Compound as collateral. In return, it borrowed $71.6 million in USDT and $21.9 million in USDC stablecoins.
This move by Galaxy Digital indicates renewed interest in DeFi protocols for investing in cryptocurrencies. While the total value locked (TVL) of the Aave protocol has decreased by 72% since its peak in October 2021, Galaxy Digital’s investment signals a potential return of belief in DeFi protocols.
Reasons Behind Galaxy Digital’s Long-Term Investment
In one of its recent reports, Galaxy Digital projected an upcoming bull run for Bitcoin. The company believes that spot Bitcoin ETFs are a better option for conventional investors to enter the crypto industry, attracting billions of dollars into Bitcoin if approved. By making significant investments in Bitcoin and Ethereum, Galaxy Digital positions itself to benefit from these potential inflows.
The CEO of Galaxy Digital, Mike Novogratz, also shares this belief in a Bitcoin bull run. He has pointed to rising adoption from Asia as a catalyst for this anticipated market movement.
Current Prices and Impact on DeFi Tokens
As of now, Bitcoin is trading at $34,194 and is expected to surpass $35,000 soon. Ethereum has experienced a smaller price increase compared to Bitcoin and is currently trading at $1,786.
The news of Galaxy Digital going long on Bitcoin and Ethereum has had a positive impact on the DeFi tokens AAVE and COMP. Both tokens have seen a 7-day increase of 7.78% and 9.50%, respectively.
Hot Take: Galaxy Digital’s Bold Move Reflects Growing Confidence in DeFi
Galaxy Digital’s significant investments in Bitcoin and Ethereum through DeFi protocols demonstrate a renewed belief in the potential of decentralized finance. Despite the decline in total value locked (TVL) in DeFi protocols since the peak of the DeFi boom, Galaxy Digital’s move suggests a shift towards increased confidence in these platforms.
This bold move by Galaxy Digital aligns with its projection of a Bitcoin bull run and highlights the company’s anticipation of substantial inflows into Bitcoin through spot Bitcoin ETFs. As the market evolves, it will be interesting to see how this investment strategy pays off for Galaxy Digital and whether other institutional investors follow suit.
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