YFI Worst Hit by Ongoing Crypto Market Meltdown; Could It Recover? - OhNo WTF Crypto

Breaking News

YFI Worst Hit by Ongoing Crypto Market Meltdown; Could It Recover?

#crypto #bitcoin

YFI has been among the worst-hit tokens in an ongoing meltdown that has wiped $65 billion from the cryptocurrency market.

As of 1223 GMT Tuesday, YFI/USD was trading about 47 percent lower from its all-time high at $44,003. The pair’s downside correction followed a major rally that brought it up by more than 2,500 percent until last week. So it appears, traders decided to lock their profits at local tops, causing the market to flip bearish later.

YFI, yearn finance, cryptocurrency, YFIUSD, YFIUSDT, YFIBTC
YFI is eyeing a $20K-retest in the coming sessions. Source: TradingView.com
YFI is eyeing a $20K-retest in the coming sessions. Source: TradingView.com

Independent market analyst Michaël van de Poppe suggested that YFI could undergo further downside corrections, especially after rejecting a move above $26,000. He noted that the bearish state of the entire cryptocurrency market could leave YFI equally weak.

Meanwhile, Sam Bankman-Fried of FTX blamed the correction in the decentralized finance sector behind the recent fall in YFI. The CEO said that the token’s underlying value largely comes from “yield farming.” But with a recent drop across the crypto board, returns from the DeFi projects have been dismissive, affecting YFI in the process.

Growth Ahead?

Away from the technicalities, YFI signaled long-term market growths based on the projected growth of its parent ecosystem, Yearn Finance.

As Mr. Bankman-Fried also noted, Yearn Finance has grown from a simple aggregator into a full-fledged DeFi ecosystem. It is because of the protocol’s creator, Andre Cronje, that have built and integrated new services atop their asset management tools.

The Yearn Finance ecosystem now includes insurance, venture financing, decentralized exchange, lending, and stablecoin products. The protocol simultaneously manages $1 billion worth of liquidity pool under its aggregation services.

Bullish YFI

Ryan Watkins, a researcher at data service Messari, said Yearn Finance is slowly becoming the Amazon of the DeFi market, especially as it powers the launch of StableCredit, a protocol for decentralized lending, stablecoins, and automated market-makers.

“StableCredit helps scale Yearn’s vaults,” Mr. Watkins explained. “Yearn is currently limited in where it can deploy capital and the current system is capped. This is the reason why the yETH vault was temporarily shut down.”

“The idea with StableCredit is that it will create more liquidity for vaults, which will help vaults scale, which will create even more liquidity, which will help vaults scale even more, and so on in a virtuous cycle.”

If successful, StableCredit can remove the caps on the Yearn Finance’s asset under management. And with more AUMs would come more withdrawals and fees for YFI holders. That, in turn, would increase the appeal of the token.



OhNoCrypto

via https://www.ohnocrypto.com

Yashu Gola, @KhareemSudlow