Crypto traders are drawn to the market by its bombastic growth and lucrative opportunities to make a profit. However, not every investor is seeking volatility or using degenerate leverage levels to gamble at derivatives exchanges.
In fact, stablecoins usually comprise half of the total value locked (TVL) on most decentralized finance (DeFi) applications that focus on yields.
There’s a reason why DeFi boomed despite Ethereum network median fees surpassing $10 in May. Institutional investors are desperately seeking fixed income returns as traditional finance seldomly offers yields above 5%. However, it is possible to earn up to 4% per month using Bitcoin (BTC) derivatives on low-risk trades.
Non-investment grade bonds yield. Source: U.S. Federal Reserve
Notice how even non-investment grade bonds, far riskier than Treasury Bills, yield below 5%. Meanwhile, the official inflation rate in the United States for the past 12 months has stood at 4.2%.
Paul Cappelli, a portfolio manager at Galaxy Fund Management, recently told Cointelegraph that Bitcoin’s “inelastic supply curve and