AAVE continues to enjoy a strong bullish performance thanks to positive sentiments arising from Bitwise Investments’ announcements about the launch of two crypto funds for Aave and Uniswap.

Bitwise, one of the major cryptocurrency investment companies that currently manages a crypto portfolio worth more than $1 billion recently launched two funds, allowing Wall Street investors to access AAVE and Uniswap with more ease. This is a major development for the crypto market because AAVE is one of the leading DeFi platforms and the new fund will open the flood gates for Wall Street money to access the value that the decentralized lending platform has to offer.

Matt Hougan, the CIO of Bitwise revealed that the AAVE and UNI funds were launched to satisfy demand from investors who wanted to access them. This means institutional investors also recognize the potential that DeFi has to offer and they do not want to miss out on such opportunities. This is good news not only for the DeFi platforms like Aave but also for the overall crypto market because it indicates that traditional finance institutions also recognize that decentralized finance is an unstoppable force.

The impact of the fund on AAVE’s price action

AAVE is currently trading at $370 at the time of this press, after rallying by 11.45% in the last 24 hours. This indicates that the news of Wall Street’s interest in the DeFi platform has been a major catalyst for AAVE’s price action considering that it has so far gained more than 20% in the last few days.

Source: Binance

It looks like Bitwise’s newly launched fund was such a strong catalyst that it fueled AAVE’s rally pushing it back above its 99-day moving average for the first time since early June. The bullish price action reflects the substantial uptick in AAVE’s buying volume, likely due to institutional buying. The price will likely push up a bit further or potentially maintain its current price levels as retail investors jump on the hype.

What to expect from AAVE price in the next few weeks or months

Bitwise did not go into details about how the funds will operate. Such companies tend to introduce a lock-up period during which investors cannot sell their tokens. If that is the case, then such a move would likely support higher prices and potentially a substantial price drop once the digital assets are unlocked. On the other hand, the company might choose to avoid any lockups at all, thus giving institutional investors the freedom of trading AAVE tokens when they want to.

Retail traders will likely take profit in the next few hours or days, paving way for a slight market correction. On the other hand, if institutional investors are buying AAVE so they can stake to earn passive income, then we might see even stronger price action from AAVE. This will undoubtedly be the case in the long-term considering AAVE’s low circulating supply that is currently at 12.9 million coins. Its maximum supply is 16 million, which makes it rarer than Bitcoin. Right now it has a $4.8 billion market cap, which means it has immense growth potential. However, that potential will only be unlocked with more DeFi adoption especially on the AAVE decentralized exchange.