Bitcoin (BTC) took the spotlight from the rest of the crypto market in 2024, but the Trump administration is quickly changing the rules of the game
Crypto data firm Kaiko Research has highlighted the potential for a rotation of interest away from Bitcoin (BTC) and towards other crypto assets in 2024, as the Trump administration’s administration quickly changes the rules of the game.
While Bitcoin has certainly taken the spotlight this year, with its price movements dominating headlines and analysis, the decentralized finance (DeFi) sector may be performing even better than BTC, at least according to Kaiko.
The company’s own DeFi index (KSDEFI) has outpaced ether (ETH) since the instrument’s inception in October 2023, bringing in roughly 75% returns in that span of time. This is noteworthy given that most of the protocols included in the index are built on Ethereum.
“This outperformance may persist into the latter half of 2025, as several assets within the index benefit from strong tailwinds,” Kaiko research analysts Adam McCarthy and Dessislava Aubert wrote in a recent report. “This trend highlights the decreasing correlation between the DeFi index and ETH over time, as the decentralized finance sector continues to expand beyond the Ethereum ecosystem.”
The index is composed of 11 DeFi tokens, the most heavily weighted being UNI, AAVE and ONDO. At least four of these tokens have powerful tailwinds for the rest of the year, the report said.
For example, regulatory developments in the U.S. may open up possibilities for decentralized exchange Uniswap and decentralized lender Aave to implement fee switches for each of their respective tokens, meaning that protocol fees may end up getting distributed to UNI and AAVE holders.
“Insiders within the respective communities have been discussing this possibility for some time, and it could serve as a pivotal moment in the evolution of both protocols and their respective tokens,” the report said.
Tokenization protocol Ondo Finance, for its part, will likely benefit from an acceleration of the tokenization trend as Wall Street keeps wading deeper into crypto, the report said.
“Despite the promise of DeFi, 2020 saw limited progress due to regulatory constraints in key markets, which varied significantly across the globe,” the report said. “But, regulatory scrutiny is easing, and the sector now has abundant opportunities for growth.”
