Bernstein Adds This DeFi Altcoin to Its Basket Ahead of the Fed Decision

With the US Federal Reserve (Fed) expecting an upcoming interest rate cut, decentralized finance (DeFi) returns are expected to become attractive again. Bernstein analysts are drawing attention to one altcoin platform in particular.

Gautam Chhugani, Mahika Sapra and Sanskar Chindalia, analysts at research and brokerage firm Bernstein, say that the interest rate cut could revive DeFi yield markets, restart crypto lending markets and increase interest in Ethereum.

DeFi offers participants the opportunity to earn returns by providing liquidity on stablecoins such as USDC and USDT. Stablecoin loan yields on major lending platforms such as Aave are still around 3.7 to 3.9 percent.

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Analysts state that DeFi markets have revived as interest rates have started to decline. The total value locked in DeFi has doubled from its 2022 low to $77 billion. The stablecoin supply remains stable at around $178 billion, while the number of monthly active wallets is at 30 million.

Based on this trend, Bernstein is adding Aave token to his digital asset portfolio. The basket also includes BTC, ETH, OP, ARB, POL, LDO, SOL, UNI, LINK, and RON.

With the strengthening of DeFi markets on Ethereum, it is expected that large investors will once again turn to crypto lending markets, offsetting ETH’s underperformance against Bitcoin.