Decentralized finance (DeFi) tokens have held up unusually well against Bitcoin over the past month, suggesting the market may be “quietly re-rating” the sector, says crypto index fund maker Bitwise.
Bitcoin (BTC) fell about 22% in June, while Bitwise’s index tracking tokens from major DeFi protocols fell only 4% over the same period, Bitwise said in a report Thursday.
“DeFi usually swings much harder than Bitcoin, so holding up this well is unusual, and almost no one is talking about it,” it said.
DeFi tokens have a reputation for being highly volatile during crypto market swings, as they’re the first to be sold by risk-averse traders. However, Bitwise said this is changing as traditional institutions have begun to use the protocols, which have stabilized the wider DeFi ecosystem.
“We think DeFi is quietly re-rating,” 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 alone generating ~$900 million in the past year.”
“We expect DeFi’s outperformance to keep playing out in Q3, the kind of shift the market tends to notice late,” it added.
Source: Bitwise
Bitwise’s DeFi index fund weighs assets by market capitalization, and its current holdings are weighted 61% toward Hyperliquid (HYPE), the native token used by the crypto perpetuals exchange of the same name that has gained more than 160% so far this year.
The index also holds Uniswap (UNI), Ondo (ONDO) and Aave (AAVE), among others, all of which have fallen by double-digit percentages year to date.
DeFi value locked drops over 2026
While HYPE has propped up the value of DeFi tokens, total value locked in DeFi has fallen nearly 40% so far this year through June, declining to just over $70 billion from roughly $115 billion in January, CryptoRank reported June 24.
The crypto data aggregator attributed the market decline to the major correction in early October, which came after the crypto market peak, when Bitcoin hit a high of more than $126,000.
However, the company said the current drawdown remains smaller than during the 2022 bear market, suggesting a more resilient DeFi market.
Bitwise says expect stablecoins, volatility if CLARITY fails
In its report, Bitwise also noted key upcoming events it expects will affect the crypto market.
It said it expects “a steady run of large firms to announce stablecoin projects” ahead of the GENIUS Act, a stablecoin-regulating bill the US made law last year that takes effect in January 2027.
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Stablecoin supply has held amid the crypto market downturn, it added, and their growth will positively affect blockchains such as Ethereum and Solana this quarter as regulators finalize their rules for the GENIUS Act.
Bitwise said it also expects the next three months will be “make-or-break for the CLARITY Act,” the crypto market structure bill currently under review and negotiation in the Senate that Bitwise said has an unlikely chance of passing before the November elections.
“If it passes, we believe it likely marks this bear market’s bottom,” Bitwise said. “If it fails, expect volatility initially, then a clearing of uncertainty as the industry keeps building under a pro-crypto SEC and CFTC.”
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