DeFi currencies have shown excellent results in recent weeks
According to CoinGecko, some of the major Ethereum-based DeFi currencies have lost value, even after Bitcoin’s recent recovery.
The website data indicates that ThorChain (RUNE), Waves (WAVES), Synthetix (SNX), 0x (ZRX), Maker (MKR) and some other tokens have fallen in the last 24 hours. Losses range from three to ten percent.
This drop occurs despite the strength in the price of Bitcoin and Ethereum, which previously pushed altcoins upwards.
This relative weakness, however, can be explained.
Jacob Franek, co-founder of CoinMetrics, defined the issue of the high transaction rates that limit Ethereum’s growth potential in this growth phase:
“I’m still not saying just that it puts a natural hard limit on how far it can go. Traders will only pay this amount if they are performing significantly well, ”concluded Franek in a response to someone who commented on his opinion.
There is also speculation that the SushiSwap disaster experienced last week is putting a bitter taste in the mouth of investors.
These investors may have withdrawn money from the table or be less willing to place risky bets on DeFi, hence the drop in Ethereum-based currencies.
Long-term trend for DeFi remains optimistic
Long-term trends in the DeFi space remain positive, say analysts.
Qiao Wang, former product head of crypto research firm Messari, recently commented:
From an investment point of view, BTC pre-2013 and ETH pre-2015 were once-in-a-lifetime asymmetric bets. DeFi pre-2021 is once-in-a-decade IMO (until proven wrong). If you’ve missed the first two don’t miss the latter.
– Qiao Wang (@QwQiao) September 9, 2020
“From the investment point of view, BTC pre-2013 and ETH pre-2015 were unique asymmetric bets. Pre-2021 DeFi is IMO that occurs once in a decade (until proven otherwise). If you missed the first two, don’t miss the last one. ”
Others in the industry think that there are fundamental factors that will take this crypto market segment to exponential levels in the coming years.