The Ethereum DeFi space has seen a rapid correction since the euphoric summer highs. The prices of top altcoins pertaining to this space have corrected by upwards of 70 percent across the board. Yearn.finance (YFI), widely branded as one of the most reliable cryptocurrencies in DeFi, has dropped to $8,500 from its $44,000 all-time high. That is a correction of 80 percent.
The correction in the price of this cryptocurrency, along with others, has shocked investors.
DeFi has been branded as the first killer use case for cryptocurrencies, aside from payments. This sector has also seen increasing support from venture capitalists, including those both inside and outside of the space.
Even with this underlying support, not everyone is convinced that DeFi will bottom soon.
A leading fund manager in the space recently reminded his followers that even though DeFi may be down by over 70 percent on average, more pain is entirely possible.
DeFi correction not over yet?
Yearn.finance’s correction is not isolated. Coins such as Aave’s AAVE, the Synthetix Network Token, and Uniswap’s UNI have dropped by around 70 percent since their summer highs. Smaller, less recognizable tokens have dropped even faster and further.
This rapid drawdown has elicited a strong response from Crypto Twitter, with outside observers and insiders both offering insights as to what they think comes next.
There seems to be a growing contingent of investors that thinks Ethereum’s tokens have further to fall, though they caveat that with the sentiment that now is a good time to begin looking for long-term buying opportunities.
Ari Paul, CIO and CEO of BlockTower Capital, recently shared his thoughts on the DeFi market.
Referencing a tweet he shared in September, which predicted the majority of this move lower, he said that buying an asset at 85 percent down from its all-time high is still not a reliable way to buy a 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.”
Paul did add in his replies, though, that he thinks that UNI and AAVE have good products and value capture mechanisms that may mean they outperform the average DeFi token moving forward.
Paul is not the only one that has shared this thought process.
Qiao Wang, a prominent analyst that has been following DeFi for a while, said:
“I constantly update my views and unfortunately it looks like there’s going to be more pain in DeFi. Originally I thought we won’t see a 80-90% crash which is typical of alts because of the level of sophistication of DeFi investors but that thesis is being invalidated.”
Like Paul, though, he remains bullish on the space as a whole and certain projects. Wang explained that the amount of intellectual capital that is entering the space is a reason to be extremely optimistic.
The post Crypto fund manager warns Ethereum DeFi crash isn’t done, even after 75% drop appeared first on CryptoSlate.
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