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Financial markets are in a rough patch, as the triple threat of inflation, rising interest rates, and geopolitical uncertainty send investors racing to the exits.
As the crypto that started it all when it launched in 2009, Bitcoin’s first-mover advantage has given it scale, mainstream acceptance, and brand recognition.
The jury is still out on whether Bitcoin is a safe-haven asset, which is a type of investment that can reliably hold or even gain value during economic downturns.
Bitcoin has fallen behind newer cryptos in technical capabilities like transaction speed and support for decentralized applications , which offer services on the blockchain.
At about $36,000 per coin, Bitcoin is down by around 47% from its all-time high reached in November last year.
Aave fits into a class of cryptocurrencies known as decentralized finance , which aim to replace traditional financial services like banks with blockchain-based equivalents to give investors more options and control over their wealth.
Aave loans are collateralized at 100%, which means their main purpose is to allow the borrower to “cash out” of their cryptocurrency holdings without selling.
While no one knows how long it will take for the market to recover, Bitcoin and Aave could make great investments while they are trading at a discount to their historical highs.