NFT Activity on Ethereum Rising as Demand for Bitcoin on DeFi Falls

NFT activity is an important element in the Ethereum blockchain, accounting for most network transfers.

Demand for Bitcoin in the Ethereum ecosystem has declined drastically since the beginning of the year.

Strong demand for NFTs and DeFi applications is helping Ethereum supporters muffle the sound of Bitcoin maximalists who have long insisted that only the original cryptocurrency mattered most.

Since the creation of the Ethereum blockchain, the case for Ether overshadowing Bitcoin has been a recurring topic in crypto.

Bitcoin maximalists claim it is still the ultimate type of digital money, stressing that the first cryptocurrency is valued at around $810 billion, which is more than double Ether’s $310 billion.

NFT Activity vs DeFis

The crypto market is diverse. Two popular applications fall under the domain of blockchain technology: NFT and DeFi.

Both applications offer huge opportunities in the crypto market. NFTs provide a value proposition while DeFi provides a platform for financial services and transactions. The involvement in both has risen sharply.

The main distinction between NFT and DeFi is that NFT refers to individual digital assets while DeFi refers to the internet-based financial system.

NFT contains a unit of data that is unique and non-interchangeable, while DeFi on its platform runs on blockchain smart contracts and eliminates intermediaries.

Total Crypto Market Cap at $1,691 Trillion in Daily Chart | Source: TradingView.com

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NFTs are boosting the ETH market

Despite the widespread crypto market collapse, non-replaceable tokens have been trading at record highs in recent months. In addition, as of July 2021, NFT network transfers have overtaken Stablecoins and all ERC-20 tokens.

NFT adoption started to accelerate towards the end of last year, with platforms such as OpenSea, the leading NFT marketplace, experiencing record trading volumes.

LooksRare, which debuted on Ethereum in early January, had over $2 billion in trading activity in its first 30 days.

The Ethereum community has taken on that role to a much greater extent and that type of blockchain development is currently experiencing a bullish phase in cryptocurrencies.

NFT seen climbing higher

Many observers predicted that Ether would continue to rise as the demand for NFT soars. Market data suggests that the market will rise exponentially in the coming months.

In 2017, the Ethereum blockchain of smart contracts served as the foundation for DeFi. Maker DAO was the first known DeFi platform.

DeFi is thought to account for two-thirds of the cryptocurrency market. The increasing interest in the DeFi platform resulted in an increase in Ethereum developers and a decrease in Bitcoin developers.

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Ethereum beats Bitcoin

Meanwhile, according to the latest data, Ethereum has surpassed Bitcoin in two metrics: on-chain transactions and transaction fees generated.

These are two important indicators as they represent the increased and widespread use of Ethereum in the cryptocurrency sector.

Ethereum is also gaining ground in other indicators, such as active addresses on each blockchain and aggregated trading volume on exchanges.

Featured image of Coingape, chart from TradingView.com

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