The Defi-sector dominated by Ethereum has grown by leaps and according to Defillama data locked the total value (TVL) in the sector again 2022 highs.
The increase coincides with what Kobeissi analysts call the “biggest short squeeze in crypto history,” because ETH stays closer to a high level.
Source: Defillama
Defi ultimately recovers from the market crash from 2022
The Defi sector stood for significant challenges in 2022 that they held until this year. No less than $ 3.6 billion was lost to hacks, exacerbated by the market crash that followed the collapse of FTX and Terra Luna, at the time crypto -kolossen.
While the activity continued, the total value (TVL) dropped drastically. Defi TVL, however, now returns from 2022.
Defi loans have also brought considerable growth. Open loans have been crossed the $ 19 billion against Q4 2024 and active loans have also been restored, in particular on chains such as Aave and Ethereum.
On Ethereum this year, loans peaked at $ 22.6 – $ 24 billion, with more than $ 35 billion in collateral, that analysts have considered a sign of renewed investor confidence.
Some important factors that encourage the recovery of the sector are, among other things, an increased maturity of the cryptomarket, the growing popularity of decentralized exchanges and credit protocols and the rise of liquid insert platforms.
In addition, investors see the loose monetary policy of the US and potential interest rates as positive catalysts for the wider crypto and defi markets.
Ethereum leads the Defi Affect
Ethereum is currently dominating the Defi sector and organizes more than 60% of Defi assets and more than half of all Stablecoins.
Source: Defillama
The market capitalization of Ethereum has increased by more than $ 150 billion since 1 July, days after net short -exposure hit record highs.
The total Defi TVL on the chain is currently above $ 80 billion, Leafs over Solana’s $ 9 billion and Bitcoin’s $ 7 billion.
The Kobeissi Letter report attributed the recent increase in ETH to various factors. It pointed out how the net lever pants on the chain reached a record high in July, with net short exposure 25% above levels that were seen in February 2025, and implied that it increased the price of Ethereum in less than a month by +70%.
President Trump’s World Liberty Financial has also purchased ETH, with his most recent transaction, based on transaction logs, a purchase of $ 5 million.
Ethereum has also received a considerable profession as an active company, with companies such as Bitmine and Sharplink -Gaming that set the standard, with the aim of becoming the strategy of Ethereum.
Ethereum-linked ETFs have also achieved funds. According to analysts, all this “fuel have added to the already furious short-squeeze brand” and many of the shorts were institutional capital.
It also says that if ETH rises another 10%, another $ 1 billion in shorts will be liquidated, which could soon push Ethereum to $ 4,000.
President Trump is also expected to soon sign an executive order, so that 401 (K) can invest pension plans in crypto in what has been advertised as one of the most bullish developments in the crypto history.
