Decentralized finance (DeFi) tokens have held up unusually well against Bitcoin over the past month, suggesting the market is “quietly reassessing” the sector, says crypto index fund maker Bitwise.
Bitcoin (BTC) fell about 22% in June, while Bitwise’s index tracking tokens of the major DeFi protocols fell just 4% over the same period, Bitwise said in a report on Thursday.
“DeFi tends to swing much faster than Bitcoin, so it’s unusual to hold up well, and almost no one is talking about it,” the report said.
DeFi tokens have a reputation for being highly volatile during crypto market swings as they are the first to be sold by risk-averse traders. However, Bitwise said this is changing as traditional institutions have started using the protocols, which have stabilized the broader DeFi ecosystem.
“We think DeFi is quietly rerating,” Bitwise said. “Token economics are improving, the gap between usage and token value is closing, and real institutions are building on names like Morpho and Jupiter, with Aave generating ~$900 million last year alone.”
“We expect DeFi outperformance to continue to materialize in the third quarter, the kind of shift that the market is often late to notice,” it added.
Source: Bitwise
Bitwise’s DeFi index fund weights assets by market cap, and current holdings are 61% weighted toward Hyperliquid ($HYPE), the native token used by the crypto-perpetuals exchange of the same name which has gained over 160% so far this year.
The index also includes Uniswap (UNI), Ondo (ONDO), and Aave (AAVE), among others, all of which are down double digits year to date.
DeFi value locked down in 2026
While $HYPE has buoyed the value of DeFi tokens, the total value captured in DeFi has fallen nearly 40% so far this year through June, from around $115 billion in January to just over $70 billion, CryptoRank reported on June 24.
The crypto data aggregator attributed the market decline to the major correction in early October, which came after the crypto market’s peak, when Bitcoin reached a high of over $126,000.
However, the company said the current decline remains smaller than during the 2022 bear market, indicating a more resilient DeFi market.
Bitwise says you can expect stablecoins and volatility if CLARITY fails
In its report, Bitwise also mentions major upcoming events that it expects to impact the crypto market.
It said it expects “a steady stream of major companies to announce stablecoin projects” ahead of the $GENIUS Act, a bill to regulate stablecoins that the US passed into law last year and will come into effect in January 2027.
The supply of stable coins has held up during the crypto market recession, it added, and their growth will positively impact blockchains such as Ethereum and Solana this quarter as regulators finalize their crypto rules. $GENIUS Action.
Bitwise also said it expects the next three months to be “make-or-break for the CLARITY Act,” the crypto market structure bill currently under review and negotiation in the Senate and which Bitwise said has an unlikely chance of passing before the November elections.
“If this continues, we think it likely marks the bottom of this bear market,” Bitwise said. “If it fails, expect volatility first, then a clearing of uncertainty as the industry continues to build under a pro-crypto SEC and CFTC.”
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