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Major Decentralized Finance (DeFi) tokens and other alternative coins (altcoins) have experienced a considerable price plunge as much of the market moves to Bitcoin as the cryptocurrency of choice. The move had been predicted by cryptounit.com and it seems like Bitcoin is in for more gains in the near future as it consolidates its position at the top of the charts. The largest cryptocurrency in the world is now trading above the $14k level while Defi tokens are posting often double digit losses against it.
The Great DeFi Price Tank
The big DeFi plunge has puzzled analysts around the world. This year was supposed to be the breakthrough year for the industry. Billions of dollars were invested in the new coin platforms mushrooming in the crypto world starting with the Uniswap exchange. It was the first fully working effective decentralized cryptocurrency exchange the world had seen. It allowed coin listing, finance and other transactions that the cryptocurrency sector had only been dreaming about before.
Naturally, the investing community responded and an outpour of big money was put into these projects. They include Uniswap, Hex2T, Yearn.Finance and others. Now most of these coins are in deep trouble. Yearn.finance is among these tokens and has lost over 70% of its value during the last month alone. Hardly a few weeks ago, it was trading at around $30k level but soon it dropped down hard and is now being traded under $10k. Couple with the phenomenal success of Bitcoin in recent times, the YFI/BTC pair has seen a record tumble and has trapped many of the shillers on the wrong side of the market. Similarly other DeFi tokens are also flashing red, often showing double digit price drops as the industry gets less and less interested in them. Uniswap’s UNI token has gone down from $4.4 to $2.4 in the same amount of time showing a decrease of around 45%. Throughout the once emerging DeFi sector the story is the same of losses.
The Weaking Altcoins
The rest of the cryptocurrencies apart from Bitcoin are called alternative coins or altcoins in short. These coins are also mostly showing either a bleak unimpressive performance in recent months or even big losses at times against the USD. Since Bitcoin continues to rise against the greenback, the altcoin/BTC pairs have posted considerable losses. This has puzzled some analysts as many previously believed that Bitcoin sets the tone and then the altcoins follow it. However, altcoins aren’t showing the same kind of gains as Bitcoin in the long-term and they continue to post losses against it. Even bigger coins like Ethereum, XRP, Litecoin, Bitcoin Cash, DASH, etc have remained largely stagnant throughout this time against the USD and posted losses against Bitcoin. Some of the altcoins holders are still waiting for their accumulated coins to take off considerably but many have already liquidated. It seems like it is all about the largest cryptocurrency in the world right now that has increased its market share back to 65% after initial drops during the course of this year.
The Future
The altcoins aren’t following the ages-old principle of following Bitcoin wherever it goes. It seems like they and Bitcoin have decoupled at times with Bitcoin being considerably bullish while they keep alternating around the yearly highs and then coming back. However, this poor performance by the smaller coins has resulted in many crypto investors pulling their investments out from them. Once they realize they are priced low and have considerable potential for profiteering, investments are expected to pour into them once again. The same trend might hold true for the DeFi sector as well. The DeFi industry energized the cryptocurrency sector throughout the year and while it did appear like a bubble in between, it has more than corrected its price index considerably. It will also be looking towards a hopeful future.