DeFi Tokens Quietly Outperform Bitcoin Amid Institutional Growth

Bitwise, a crypto index fund maker, believes that decentralized finance (DeFi) tokens are quietly re-rating as they hold up well against Bitcoin. In June, Bitcoin fell about 22%, while Bitwise's index tracking DeFi protocol tokens only dropped 4%. This unusual stability is attributed to traditional institutions using the protocols and stabilizing the wider DeFi ecosystem.

The report highlights that DeFi tokens typically swing harder than Bitcoin during market downturns. However, with the growth of real institutions building on top of names like Morpho and Jupiter, token economics are improving, and the gap between usage and token value is closing.

Bitwise's current holdings in its DeFi index fund are weighted 61% toward Hyperliquid (HYPE), which has gained over 160% this year. The index also holds Uniswap (UNI), Ondo (ONDO) and Aave (AAVE), all of which have fallen by double-digit percentages year to date.