Why YFI price is down so far from its $44,000 all-time highs?

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CryptoSlate market data now shows that one YFI now equals one Bitcoin once again. Actually, as of now, YFI price, trading at $13,000, is now worth around 0.93 Bitcoin — far from the all-time highs set a few weeks ago.
Shortly after Yearn.finance YFI coin launched in July, which changed the Ethereum DeFi world forever, a pseudonymous Crypto Twitter personality named “Blue Kirby” started to popularize the “1 YFI = 1 BTC” meme. The theory was that the price of one YFI would hit the price of Bitcoin, which was then around $11,000.
After weeks of upward price action, the cryptocurrency eventually achieved that milestone.
For a while, investors were euphoric. YFI shot as higher as $44,000 by the end of August in a spectacular rally that generated wealth for the early adopters that mined the coin for no upfront cost.
That means that at its peak, one YFI price was worth around 3.6-3.8 BTC, making it the first coin to have reached such a high ticket price. Of course, its market capitalization was far from Bitcoin, but this was seen as an accomplishment nonetheless.

Why YFI price is down so far from its all-time highs

Sam Bankman-Fried, CEO of crypto trading platform FTX and fund/market maker Alameda Research, has explained that there are three major factors why YFI price has seen such a strong correction from its all-time high:

  • The rest of the DeFi coins have undergone a strong correction, which is resulting in steep corrections in most players.
  • finance had a number of “bad PR events,” such as some controversy over a side project called Eminenceand some bugs in the protocol’s core products, called vaults.
  • Yield farming yields have fallen dramatically. This hurts YFI particularly because much of the token’s intrinsic value is derived from acting as a claim of a portion of the yields generated by the protocol.

It’s worth noting that majority of altcoins, save for some names like Litecoin and Polkadot, are strongly underperforming BTC amid this surge higher. YFI, of course, fits into this pack.
Su Zhu, head of Three Arrows Capital, attributed this price trend to the rapid nature of Bitcoin’s ongoing rally, which is forcing capital and attention on Bitcoin:
$BTC going up swiftly is not only not bullish for alts but it’s bearish reasons for this are myriad but boil down to the fact that money is a coordination game and Bitcoin is the Schelling point; this is independent of how you feel about it, community is literally irrelevant.”

The revival of Yearn.finance

However,not all hope is lost for YFI, analysts say.
Andrew Kang, founder of Mechanism Capital, recently said:
“The argument that YFI / Yearn value is dependant on crazy yields is missing the forest for the trees. Yield opportunities continue to grow Future strategies: – 10x-100x leveraged short DAI – Basis/Funding trades – UNI Farming – BAL Farming – L1/L2 Liquidity Bridging – etc.”
This is already starting to happen as Yearn.finance developers roll out new vaults such as the 3pool LP vault and the gUSD vault.
These extraordinary Curve yields today (46% 3pool, 55% BUSD pool, 52% Compound pool, 57% gUSD pool) will filter down to yearn vault yields tomorrow.$YFI about to be reborn.

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