Bitwise: DeFi may be quietly reassessing after outperforming Bitcoin

In the past month, decentralized finance (DeFi) tokens have outperformed Bitcoin. Bitwise pointed out that this divergence may reflect a \"quiet revaluation\" that the industry is undergoing rather than a brief rebound. In its latest crypto market review, the company mentioned a significant change in relative performance in June: Bitcoin fell about 22%, while Bitwise\'s index, which tracks major DeFi protocol tokens, fell only about 4% over the same period.

Bitwise describes this relative stability as \"unusual\" because DeFi tokens have traditionally been one of the first assets traders sell when market risk appetite declines. The report believes that the volatile characteristics of the field may be changing as more traditional institutions begin to use DeFi infrastructure. Bitwise believes this support will help stabilize the entire ecosystem.

Core Points

Bitwise\'s DeFi token index fell about 4% in June, while Bitcoin fell about 22%, indicating that DeFi has shown unusual resilience.

Bitwise attributes this resilience to improvements in token economics and a narrowing of the gap between DeFi usage and token value.

Institutional participation is seen as a stabilizing force as some companies are building based on major DeFi protocols such as Morpho and Jupiter. Among them, Aave was specifically mentioned, saying it generated approximately US$900 million in revenue in the past year.

Despite the strong performance of tokens, DeFi\'s total locked value (TVL) fell. CryptoRank reported that TVL fell to just over $70 billion from about $115 billion in January.

Bitwise expects that announcements related to stablecoins will be intensively released before the GENIUS Act takes effect in January 2027. At the same time, the agency pointed out that the CLARITY Act could become a catalyst for recent market fluctuations.

Why Bitwise believes DeFi is being repriced

Bitwise\'s core point is that DeFi\'s traditional model-which fluctuates more than Bitcoin in market downturns-has not emerged in the past month. The company said this difference in relative performance was both \"unusual\" and largely ignored by mainstream discussions, meaning market positions may not yet reflect the signals that token prices have sent.

report also points out that this is not just a simple momentum story. Bitwise believes that DeFi\'s token economics is improving and that the long-standing disconnect between platform usage and token value is narrowing. Under this framework, DeFi\'s outperformance is more due to the transformation of DeFi service demand into token value, rather than pure speculation.

Bitwise further pointed out that the actual use of institutions in the real world plays a stabilizing role. The company specifically mentioned Morpho and Jupiter, believing that institutions have begun to build in these areas. At the same time, Bitwise cited Aave\'s activity data-which it said generated approximately $900 million in revenue over the past year-as evidence that the core DeFi market remained economically active even as the cryptocurrency market cooled overall.

Bitwise\'s DeFi Index Composition

Bitwise\'s DeFi Index Fund is market capital-weighted, and its current composition explains why the portfolio is resilient. The index allocates approximately 61% of its weight to Hyperliquid\'s Native Tokens (HYPE), which are associated with the perpetual contract exchange ecosystem. Bitwise pointed out that HYPE has risen more than 160% so far this year.

The index also includes other important DeFi projects such as Uniswap (UNI), Ondo (ONDO) and Aave (AAVE). Despite being major components, the tokens have generally fallen in the year-to-date period, with Bitwise saying several of them have experienced double-digit declines. This is important for investors because it suggests that overall index performance is supported by a concentrated outlier (HYPE), while other widely watched agreements face individual retractions.

Falling value of lockups-resilience may not mean growth

Token performance does not automatically translate into increased capital deployment. Although Bitwise\'s index outperformed Bitcoin in June, CryptoRank reported that DeFi\'s total locked value (TVL) dropped significantly throughout 2026.

According to CryptoRank data cited on June 24, DeFi TVL has fallen nearly 40% so far this year, from a level of about $115 billion in January to just over $70 billion. The data provider attributed most of the decline to a sharp correction in early October, after the entire cryptocurrency market peaked-when Bitcoin peaked at more than $126,000.

CryptoRank also pointed out that the current retracement is smaller than during the 2022 bear market, indicating its relative durability. Taken together, the divergence between token performance and TVL reveals an important detail: DeFi may be able to stabilize or improve token prices despite weak liquidity-especially when certain parts of the ecosystem (such as derivatives exchanges or specific liquidity markets) are relatively favored by traders and institutions.

Policy Catalyst: stablecoins and the CLARITY Act

Bitwise\'s report is not limited to performance comparisons, but also highlights regulatory and legislative developments that are expected to affect market conditions. One of the main focuses was stablecoins, especially before the introduction of the GENIUS Act. The bill is a stablecoin supervision bill passed by the United States last year and is scheduled to take effect in January 2027.

Bitwise expects that \"a series of large companies\" will announce their stablecoin projects before the GENIUS Act is implemented. The company also pointed out that the supply of stablecoins remained supportive despite the recent downturn. Bitwise believes that continued supply growth should benefit major settlement networks such as Ethereum and Solana this quarter as regulators finalize rules around the GENIUS Act.

In terms of market structure, Bitwise said that the next three months could be a \"make-or-break\" period for the CLARITY Act currently being reviewed and negotiated in the Senate. Bitwise believes it is unlikely that the bill will pass before the November election.

The report outlines two possible scenarios. If the CLARITY Act is passed, Bitwise believes it could mark the bottom of the current bear market. If it fails, Bitwise expects initial volatility and then a period of \"dissipating uncertainty\" as the industry continues to build in a regulatory environment. Bitwise describes the current regulatory environment as a regulatory model more biased towards the SEC and CFTC.

The practical conclusion for investors is that the market may be weighing short-term uncertainty in structural policies with the long-term momentum of stablecoin-related deployments. Despite the decline in TVL, DeFi tokens are still performing well relative to Bitcoin, and traders may be increasingly concerned about whether liquidity breadth will return or whether token strength will continue to be concentrated in specific areas.