252 Interactions, 2 today
According to CoinMarketCap, Yearn Finance was trading near the $36,228 mark at the time of publication. Although the aforementioned price level was 20% below its ATH, the token was seen rallying to close the gap. Indeed, with YFI up just under 10% in the last 24 hours, there is revived hope among many in the group that the DeFi token will scale a new ATH soon.
However, the TVL in yearn.finance remains well below the rate seen in August-September 2020. As a result, the short-term target will be a TVL valuation of $350 million.
In certain ways, YFI and other top DeFi tokens like Maker, Aave, SUSHI, and UNI make more appeal to retail investors right now than Bitcoin. This is a provocative assertion, but it is obvious that Bitcoin’s “Digital Gold” story is insufficient for navigating a 20% drop every few weeks in the present market cycle.
Furthermore, there are a variety of entities that do not believe in gold, so “Digital Gold” is worthless to them. Instead, physical assets that can be both valued and priced, such as DeFi tokens, are more important. Unlike Bitcoin and Ethereum, which have relatively unknown valuations, top DeFi tokens can be priced, produce cash flow, and have inherent value. Since they produce cash, it is easier for institutions and hedge fund managers to value them using conventional finance principles.
This is a game changer, and this narrative is becoming more important as institutional investment flows grow. Most ETH-based DeFi tokens outperform altcoins, and these are the ones that matter to institutions: UNI, AAVE, SNX, SUSHI, COMP, MKR, YFI, UMA, BNT, and REN.
For example, in 2020, the YFI/BTC trading pair was one of the few markets in DeFi that delivered strong regular and steady returns to retail traders. At press time, YFI had a nearly 10% 24-hour price rise and a more than 45 percent spike in trading volume, indicating that it could be leading the price chart revival.
Furthermore, with YFI’s number of exchange withdrawals recently reaching a new low, it is clear that liquidity is available. As a result, traders could be able to break past some current selling pressure to keep the market surge for YFI and, by extension, other top DeFi tokens running.