Since 2024, the total value locked (TVL) in DeFi has decreased amid changes in the crypto market, influenced by Donald Trump's victory in the US elections and its impact on crypto assets.
TVL Drop Post-Elections
Since the US elections, the total value of assets locked in DeFi reached a peak of $138 billion by December 17 but decreased to $92.6 billion by March 10. Analyst Miles Deutscher noted this decline.
Challenges for Ethereum and Bitcoin
Solana faced criticism as memecoin popularity faded, while Ethereum experienced its challenges, failing to reach a new all-time high as Bitcoin surpassed $109,000 on Trump's inauguration day. According to DefiLlama, Ethereum's TVL fell by $45 billion.
Ethereum's Reaction and Prospects
Approximately $1.8 billion worth of cryptocurrency was withdrawn from exchanges in early March, marking a historical seven-day net outflow. Despite Ethereum's 10% price drop, the outflows indicate long-term investor interest. The Pectra upgrade, aimed at improving Ethereum's scalability, faced some challenges on the Sepolia testnet.
Amidst shifts in US politics and crypto market dynamics, the DeFi sector continues to face challenges but holds potential for recovery through technological innovation.
