Still staring at Bitcoin? DeFi’s return in the bull market may far exceed Bitcoin!
If you believe that the currency circle will usher in a violent bull market in the next year, if you want to make more money in this bull market, then from now on, let go of Bitcoin, All in DeFi.
If you don’t get in the car in 2020 DeFi because you don’t know enough to understand, then in 2021, if you are still complacent, this express train will be farther and farther away from you.
In the past month, DeFi tokens have risen amazingly. The median increase of DeFi tokens with a market value of more than $100 million is 131.77%, while Bitcoin’s increase in the same period is 12.86%. Obviously, holding BTC in the bull market cannot fully enjoy the bull market feast.
According to Babbitt’s statistics, the best performer in January was ALPHA, which rose more than 10 times. The “DEX Three Musketeers” CRV, UNI and SUSHI also increased significantly, which were 304.84%, 275.05% and 259.09% respectively.
The cognitive barriers behind the DeFi explosion
In the fall of 2020, a saying in the currency circle is particularly popular: “Who is selling such precious value coins?”
After Compound started liquid mining last summer, the DeFi market was detonated and liquid tokens became popular. Since these tokens are dug out by users through depositing funds to provide liquidity, some large accounts with financial advantages continue to dump DeFi tokens to the market through mining and selling. When the funds are unsustainable, the price of these tokens is huge. Fell.
At that time, Jiang Zhuoer, a well-known miner, made a sharp comment on the deal with DeFi tokens. He felt that DeFi tokens were rubbish.
Looking at the current market again, UNI, SUSHI, CRV and other DeFi tokens that fell into scumbags last year have all become popular. If you don’t have these tokens in your portfolio since the end of last year, you are embarrassed to chat with others. , And those investors who are selling at low positions are beating their chests.
Why is this happening?
If you think the project has become valuable because the price of the token has risen, this is turning the cart before the horse.
Since the DeFi liquidity mining boom dissipated last fall projects that have stood the test of the market have survived, and various operating indicators have steadily increased.
The number of active addresses. Currently, the number of active addresses participating in DeFi has exceeded 1.3 million, which was only over 500,000 at the end of September last year.
Locked-up volume, the current locked-up volume of DeFi projects is more than 48 billion US dollars, less than 15 billion US dollars at the end of September last year.
Daily trading volume, the current daily trading volume of DEX is 2.7 billion US dollars, less than 500 million US dollars at the end of September last year.
Daily borrowing amount. The current daily borrowing amount of mortgage loan products is 5.6 billion US dollars, which was less than 2.3 billion US dollars at the end of September last year.
Daily revenue, the current cumulative daily revenue of mainstream DEX is 6 million US dollars, at the end of September last year was 1.5 million US dollars.
These data are the fundamentals of the price growth of DeFi tokens, although most of these tokens currently cannot directly capture the value of project development. What does it matter? As long as the project is sustainable, people are willing to pay for their dreams. This is why uniswap stopped liquidity mining in November last year, and the price of UNI was able to reach new highs after a brief drop.
The following paragraph comes from a well-known DeFi investor. He has made a lot of achievements in the subdivision leaders in the DeFi field such as AAVE, SNX, UNI, and SUSHI. He gave this DeFi token from a more grand narrative view. The logic of the outbreak:
“This month, DEFI is like a great discovery of value. The popularity has remained high. Many people have begun to the influx and see more distrust and bubble doubts. It does not matter. The expected difference is the source of profit, and disagreement is the guarantee of income. ,
Just like the confrontation between the two armies, it requires constant reversal of newcomers and old comers. From a personal point of view, DeFi may be the third evolution of the underlying grand narrative logic in the encryption field. The first time BTC brings value storage, the second time ETH brings With the arrival of Dapp everything, the third DeFi has brought about a valuation reconstruction. Of course, other projects have advanced very well this year, but the mainline of DeFi is like a sharp blade that impacts the industry pattern time and time again.
Each round of the A-share market is big. In the bull market, there is a sector that runs through the entire bull market, that is, it rises from start to end like a spiral. Of course, it is normal to decline in stages, and it can fall in market value, but it cannot fall in rankings. Not to mention that Top10 projects or Top100 projects will have fierce competition.
The market value, or price, is very instructive in all areas of economic production. Price is a signal, and its biggest function is to convey information that you don’t know or you misjudged. From the perspective of a rational economic man, And you need to adjust your own production, operation or investment decision-making process based on prices. Big Bull shares require you to spend more time studying. We may not be involved in DeFi, but we are involved in an era. ”
The DeFi market has developed to this point, and there are still many people who are resistant and feel that it is a bubble. Tesla’s price-earnings ratio is 1,000 times, and its market value exceeds the sum of mainstream traditional auto companies. Is it a bubble? The market value of Maotai Maotai exceeds ICBC, is it a bubble? For these people, it’s useless for you to reason with them, only “increased approval”.
Bent into the game and concentrate on making money
This round of DeFi bull market will have a more violent ICO bull market in 2017. The ICO boom in 2017 is more like the Internet bubble in 2000, with only concepts without large-scale practical applications. A few years after the bursting of the Internet bubble, e-commerce, search engines, social networks, etc. have rapidly emerged, bringing the rediscovery of prices for Internet companies.
A few years after the bursting of the ICO bubble, BTC value storage and DeFi applications on ETH are moving towards the mainstream, bringing the rediscovery of cryptocurrency prices.
In the big bull market of 2017, the circulating market value of TOP10 projects was all in the tens of billions of dollars. Those ICO tokens that now seem very funny have created the myth of a hundredfold and thousandfold riches. After 4 years of development, the Ethereum ecosystem has unprecedented prosperity, and the “DeFi Bull” has arrived. DeFi makes the blockchain not only usable but also profitable. If you are willing to bear the risk of impermanent loss, you can deposit your assets into the DEX agreement to provide liquidity, with an annualized return of more than 80%.
If you pursue stability, you can also convert your assets into USDC and deposit them on the mortgage lending platform. The annualized income can also be more than 10%, which is more fragrant than the bank. What’s more, in the easing environment of the global water release, the core assets of the Chinese and American stock markets are soaring, and the currency circle will also enjoy the dividends brought by the global water release.
Currently, among the TOP10 projects in the currency circle, there are only two with a market value of 100 billion and only 6 with a market value of tens of billions, which is far from the bull market in 2017.
At the same time, the market value of Bitcoin at the high point of the bull market in 2017 accounted for about 33%, and now this value is about 60%.
Another point is that the current Chinese people are still very restrained, and there is no crazy scene like the ICO boom in 2017.
Therefore, this bull market has just begun, and all we have to do is to get into the game and make money. The stable ones can hold Bitcoin and Ethereum, and the aggressive ones can buy DeFi blue chips in the secondary market. This time window is estimated to be closed at the end of this year, remember to evacuate in time before the tide recedes.