The price of Ether (ETH) suffered a plunge yesterday. This contributed to a sharp tumble for DeFi tokens, including yearn.finance’s YFI and Uniswap’s UNI …
The fall of DeFi YFI and UNI tokens has apparently been accelerated by that of Ether (ETH). The price of ETH has indeed undergone a correction yesterday. While it exceeded 385 dollars, it lost more than 14% of its value to touch 330 dollars:
On the morning of September 22, it traded for $ 344, and its market cap amounted to $ 38 billion. This has apparently resulted in Decentralized Finance (DeFi) markets .
… and brings down DeFi tokens, including YFI and UNI
The tokens in the decentralized finance sector have almost all lost between 15 and 25% of their value since yesterday. But Bitcoin Loophole tokens in particular blame the blow: the UNI and the YFI .
The Uniswap governance token was launched very recently: September 17th. After starting to trade around $ 3 on the same day, it had jumped towards $ 8. But it failed to stay above that level, and fell below $ 4 yesterday, losing more than half of its value.
As for the YFI of yearn.finance, it also experienced a particularly marked fall. Its price was over $ 41,500 just a week ago, but it has quickly lost momentum since then, reaching $ 21,728 yesterday:
Why this tumble?
As we have seen, this fall in DeFi tokens seems to have been accelerated by the decline in ETH. But she had already initiated upstream. For UNI, the downfall was almost inevitable. 400 UNIs had been distributed to Uniswap users in recent days, to mark the launch of the asset. Investors therefore hurried to take advantage of the favorable price : 400 UNI corresponded to more than 3,000 dollars when the token still exceeded 8 dollars. UNI’s massive sales therefore logically followed.
As for YFI, the scenario is similar. In recent days, this supposedly worthless token has surpassed $ 40,000, even as Bitcoin (BTC) struggled to stay above $ 10,300. The price had been boosted by its addition to Coinbase Pro , and had taken + 65% in 48 hours . Investors therefore decided to rake in their profits, which caused the sales and the fall in the price we know.
History therefore seems to be repeating itself for DeFi tokens. Investors rush to these new assets, attracted by the lure of profit, and propel their prices… Before causing equally spectacular falls . It is therefore necessary to continue to exercise great caution when looking into this still new field.