AAVE Surges Amid DeFi Boom and U.S. Regulatory Tailwinds

AAVE, the native token of leading DeFi lending protocol Aave, surged to $330 on Monday before consolidating around $316, marking its highest level in months. The token gained 8% over the weekend, fueled by renewed interest in decentralized finance and a broader crypto rally led by Bitcoin’s surge above $120,000.

Aave continues to dominate the DeFi lending sector with over $50 billion in total value locked (TVL), a new record for the protocol. According to a recent report by 21Shares, Aave could be a top beneficiary of the proposed GENIUS Act in the U.S., which is expected to create a clearer regulatory framework for crypto lending.

Currently, Aave holds 5% of all circulating stablecoins, the largest share among DeFi protocols, using them to generate yield. It also issues its own decentralized, overcollateralized stablecoin, GHO, which now has a circulating supply of $312 million.

Looking ahead, Aave is set to capitalize on growing institutional interest through its upcoming Horizon initiative. The project will allow institutions to borrow stablecoins against tokenized real-world assets, such as money market funds, enabling compliant and capital-efficient on-chain borrowing.

Technical indicators support the bullish outlook for AAVE. Trading volume spiked to over 159,000 units, suggesting significant institutional interest. A key support zone formed between $304.25 and $305.63, while resistance emerged near $327.40. The $320 psychological level remains a consistent demand area, reinforcing bullish momentum.

As crypto markets rebound and regulatory clarity improves, Aave stands out as a blue-chip DeFi project attracting both retail and institutional capital.