Some Experts Believe That the Fundamentals for Ethereum Have Never Been Stronger
It’s been a torrid time in the DeFi world over the past few days. The best example of this pattern is Yearn finance (YFI), generally viewed as the “index” for Ethereum’s DeFi space.
The token is down by 35% last week alone and almost 50% from the highs achieved just a few weeks ago.
Other major tokens in the DeFi world have also witnessed strong corrections, with some falling even further than YFI from their recent highs. See the level of carnage in the DeFi space below:
- UNI — down by 45%
- Nexus — down by 47%
- ETH — down by 30%
- Aave — down by 48%
- SNX — down by 53%
- YFI — down by 46%
This strong correction has left numerous wary as to what comes next for this hot sector of the crypto world.
The majority, however, remain optimistic about DeFi’s long-term future. However, it’s worth taking on board that those that said this, are uncertain where precisely the current bear trend will bottom out and then reverse upward.
Ethereum DeFi’s Fundamentals Are Better Than Ever.
DTC Capital founder Spencer Noon believes that while the crypto market is in a bad place currently, he thinks that the fundamentals of the DeFi world are better than ever.
He said the “Crypto markets are red today. But the consensus among most investors is that this is macro-driven; not crypto driven. The fundamentals for BTC/USD, ETH/USD, and DEFI/USD have never looked better. Some will BTFD. Others will scale in. I expect both will be rewarded handsomely.”
He added that this rationale applies to Bitcoin and Ethereum, both of which have been among the strongest-performing assets during the Coronavirus pandemic.
One reason why Noon believes that DeFi is in such a space in the short term is the relatively high-interest rates offered in this ecosystem in contrast to that of the traditional finance world.
The Crypto investor and pundit made this point clear on the 21st of September when he shared an advert for a fintech company offering a savings product that earns users 3% per annum in contrast to the majority of banks that offer between 0.01% to 0.9% per annum on cash deposits.
DeFi, on the other hand, has products generally regarded “safe” by auditors that can earn over 20% per annum. And more risky products, often related to food coins, can earn returns in the 100% margin per annum.
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