With bitcoin approaching all-time highs amid strong spot exchange-traded fund inflows, analysts at research and brokerage firm Bernstein anticipate a “big bang” DeFi recovery to come next.

While the bitcoin rally can be attributed to the spot ETFs, following all-time highs for bitcoin above around $69,000, a broader-based market recovery is expected to be led by the DeFi niche — accounting for six of the ten largest revenue-producing protocols in crypto, Bernstein analysts Gautam Chhugani and Mahika Sapra wrote in a note on Monday.

The DeFi segment got “completely wiped out” during the last cycle, playing a game of unsustainable yields driven by subsidies from token incentives (inflation) that ultimately came crashing down, the analysts argued.

This was exemplified by the collapse of …