The decentralized finance (DeFi) space has seen an extreme correction over the past few days and weeks in spite of a Bitcoin rally. The leading cryptocurrencies pertaining to this space are now down by over 70% from their all-time high (on average) while BTC has gained 30% in the past two weeks.
For one, Yearn.finance (YFI), a top DeFi coin, has dropped by around 20% from its all-time high. YFI peaked at $44,000 some two months ago as buyers flooded in en-masse, though the correction that followed was severe as early investors sold off. For one, one of the DeFi’s coins most ardent supporters liquidated his entire stash of coins, on-chain data shows.
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Top DeFi Coins Continue to Crash
Top DeFi coins continue to crash despite strength in the price of Bitcoin and Ethereum. ETH is surging higher on the news of the ETH2/Serenity Deposit Contract being released by developers of the upgrade today.
Uniswap, Yearn.finance, and Aave have all dropped majorly over the past 24 hours. Uniswap’s UNI is the worst-performing large-cap DeFi coin at -12.5% in the past day. UNI has been suffering as a result of declining volumes on the Uniswap exchange, which affects the protocol revenue that will soon be distributed to token holders.
This latest leg lower only adds to an extremely weak trajectory that DeFi coins have traded in over the past two months.
The drop in DeFi comes in spite of extremely strong fundamentals, including a rising number of deposits into the ecosystem and a number of key fundamental developments.
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Drop Not Done Yet?
This battered and bruised space is expected to lose even further steam in the weeks ahead, fund managers say.
Ari Paul, CIO and CEO of Blocktower Capital, recently reminded his followers that buying an asset class down 85% from its all-time high does not guarantee that one bought the bottom:
“Defi down 85% yet? That’s a point to *start* looking for value, but remember that the fall from 85% to 95% down is another 65% loss.”
There also seems to be an overall bullish sentiment for Bitcoin, which should compress altcoin returns. BTC is expected to strongly outperform altcoins if the leading cryptocurrency appreciate rapidly.
Related Reading: 3 Bitcoin On-Chain Trends Show a Macro Bull Market Is Brewing
Featured Image from Shutterstock Price tags: yfiusd, yfibtc, yfieth, uniusd, unibtc, aaveusd, aavebtc, aaveeth, unieth Charts from TradingView.com DeFi Coins Yearn.finance (YFI) and Uniswap (UNI) Drop 10% Despite ETH Bounce