Huge interest is flowing into the decentralised market, much of it from local investors following the intense crackdown on the Chinese crypto market. Led by Uniswap (UNI), tokens from decentralised exchanges (DEX) gained an uptick in the past few days, while centralised exchange tokens barely increased.
UNI is the native and governance token of the Ethereum-based decentralised exchange, Uniswap. The price of UNI rebounded from a low of US$17.77 on September 26 to over US$45, making a quick return of about 47 percent within 24 hours. At the current price of US$24.40, UNI is still up by over 20 percent in the past seven days:
A few other DEX tokens, including the SushiSwap token, also noted an increase. SUSHI posted a 37+ percent increase within the same period as UNI, although the price had retraced back to US$9.80 at the time of writing. An index from Messari showed that 60 DEX tokens gained 10.27 percent combined, while 13 CEX tokens gained 0.77 percent at the same time.
How China Crackdown is Benefiting DeFi
The Chinese government took heated measures to crack down on the local crypto market following the recent pronouncement by the People’s Bank of China that cryptocurrency trading is illegal. Consequently, many exchanges that operated in the country have either closed or migrated to other regions. Major exchanges Binance and Huobi have also said they will prohibit users from Mainland China.
Many argue that Chinese traders can still find their way around via the decentralised market, which constitutes crypto protocols operated without any central body. This could be the reason behind the uptick in the price of DEX tokens, and more DeFi tokens may again outperform Bitcoin and other major altcoins if more traders continue to flood into the DeFi market.
The great rotation into everything decentralised is upon us and all thanks to the latest and undoubtedly most aggressive crypto ban by China.
Denis Vinokourov, head of research, Synergia Capital
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