Blockchain data: Ethereum’s Yearn.finance (YFI) has room to rally after record rally 🚨 This article is 4 years old...
News ▸ Ethereum · Yearn.finance ▸ DeFi
Blockchain data: Ethereum’s Yearn.finance (YFI) has room to rally after record rally
2 min read
Updated: Nov. 7, 2020 at 2:17 pm UTC
Cover art/illustration via CryptoSlate. Image includes combined content which may include AI-generated content.
Even amid the ongoing Bitcoin and Ethereum correction, which has brought the two cryptocurrencies down 11 percent and 19 percent from their local highs, respectively, Yearn.finance (YFI) has held up well.
The native governance token of the Yearn.finance protocol, one of the largest in the DeFi space, is up three percent in the past 24 hours as per CryptoSlate data. The Ethereum-based crypto is now pushing $33,000.
The coin is poised to extend higher due to fundamentals and on-chain trends according to a recent analysis by Santiment, a blockchain analytics firm.
Santiment: YFI could continue to push higher after a record-setting rally
YFI may be poised to move higher, even as Bitcoin and other cryptocurrencies are crushing by a falling stock market and a rising U.S. dollar.
Santiment reported on Sep. 2 that the asset is poised to continue its move higher due to a confluence of three on-chain and sentiment trends:
- YFI is being deposited into Aave’s lending pool, suggesting that investors are “confident that YFI will rise in the long run.”
- Social volume has continued to trend higher as the price has dropped.
- YFI is being withdrawn from crypto exchanges, decreasing the supply available to fill market demand.
1) $YFI hit an all-time high of $38,404 as we crossed into September. Since first being covered in our previous article (https://t.co/WRzQBmsZp6), it is a cool +1,483%. Our latest covers:
✴️The #Aave lending pool indicates $YFI holders are pretty pic.twitter.com/sAo5Dm1c1e
— Santiment (@santimentfeed) September 2, 2020
Others agree with the sentiment that YFI will continue its ascent in the days and weeks ahead.
Economist and cryptocurrency trader Alex Kruger noted that the release of Yearn.finance’s yETH Vault will catalyze an influx of investment into both ETH and YFI. The Vault is a product that allows investors to obtain a yield on their ETH deposits, thereby making Ethereum a productive asset.
The reason why this will generate buying demand for YFI is because the Yearn.finance protocol charges users of the vault a performance and withdrawal fee. Those fees are then pooled and distributed to holders of the YFI coin, effectively making the coin a dividend-yielding one.
The Yearn yETH vault will drive increased demand for both $ETH and $YFI. It's all about yields. https://t.co/7L75ZFOEhF
— Alex Krüger (@krugermacro) August 31, 2020
All eyes on the DeFi space
It’s important to note that in a sense, YFI is just a proxy for investing in the rest of the DeFi space; if decentralized finance loses steam and yields drop, YFI will drop as it will collect fewer fees for holders of the coin.
Thus, it’s important to analyze the rest of the trajectory of the DeFi market when investing in YFI.
Fortunately, a trend of growth is seemingly intact as capital, users, developers, and innovation continue to trickle into this segment of the crypto and blockchain market.
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Santiment
The Santiment platform gives users a 360° overview of the crypto market and its biggest driving forces.
Alex Krüger is an economist, technical analyst, cryptocurrency trader and founder of Aike Capital.