The crypto market is in a slump: stablecoin rise indicates a return of funds

This week, the crypto market has shown a volatile downward trend, with the market sentiment index dropping from 11% to 8%. Nevertheless, the market capitalization of stablecoins has begun to rise rapidly, with USDT reaching $14.27 billion and USDC reaching $5.72 billion, increasing by 0.49% and 2.32% respectively, indicating that institutional funds are re-entering the market, primarily from the United States.

After the release of economic data and the Federal Reserve's beige book, the market gradually eliminated concerns about a U.S. economic recession and began to anticipate that the Federal Reserve would cut interest rates three times this year, possibly starting in May. However, this did not alleviate market sentiment; instead, the recent policy fluctuations have led to severe volatility in Bitcoin prices, exacerbating market panic. Most altcoins underperformed compared to the benchmark index.

Market Hotspot Analysis

Aave performs outstandingly

Aave performed outstandingly this week, with a TVL rise of 5.86%, making it the second fastest growing among the top 20 DeFi projects. The price of AAVE token rose by 21.38%, performing excellently among the top 50 tokens by market capitalization.

The popularity of Aave mainly stems from two factors:

1. Plan to optimize ecosystem governance and token economic model, including buyback tokens, increase staking rewards, and improve liquidity management, etc.

2. The White House supports the repeal of DeFi trading report rules, reducing compliance burdens and encouraging innovation.

As a leader in DeFi, Aave's initiatives may lead the direction of industry development. In the current market environment lacking innovation, Aave's focus on strategies that bring actual returns to users has gained recognition from investors. It is expected that more DeFi projects may shift towards dividend or buyback models to enhance token value in the future.

Berachain continues to rise

Despite the overall market decline, Berachain's TVL still rose by 17.21%, reaching $3.449 billion, ranking sixth among all public chains. Its token BERA price corrected by 12.94%.

In the Berachain ecosystem, the LSD project Infrared Finance and the DEX project BEX have seen significant rises of 31.15% and 25.22%, respectively. This is mainly due to their high APY strategies, such as Infrared Finance's WBERA APY remaining around 120% and BEX's stablecoin pool APY maintaining around 16%.

Berachain's core strategy revolves around the DeFi track, achieving "staking is productivity" through a dual-driven approach of staking and liquidity release. The key to its success lies in maintaining a high APY, ensuring that user yields exceed the decline in token value, while also reducing supply through buybacks.

Currently, the staking ratio of the BERA token on the Berachain chain is about 30%, with room for growth. As more BERA enters staking, the circulation will further decrease, which is optimistic for the future development prospects of Berachain.

Important Events Next Week

• March 12 ( Wednesday ): US February CPI year-on-year data released
• March 13th ( Thursday ): Web3 Amsterdam 2025 conference will be held

Summary

This week, the crypto market has shown a complex pattern amid fluctuations and panic sentiment. Although stablecoin funds have flowed back and some hot projects have solid fundamentals, the overall market is still affected by macro policy uncertainties and insufficient investor confidence. In the future, projects like BTC, AAVE, and Berachain may become highlights due to their fundamental advantages and innovative strategies. Investors need to continuously pay attention to on-chain data, the direction of macro policies, and the upcoming token unlock events to seize opportunities and avoid risks.