The decentralized finance sector is receiving a lot of attention in 2020. Analysts believe that the new industry will continue to develop, and named promising cryptocurrencies
Since the beginning of November, popular DeFi tokens have shown multiple growth. For example, the price of the YFI coin, after falling to a local minimum of $ 7.8 thousand, increased by 250% and is now $ 28 thousand. The AAVE cryptocurrency has risen in price by 200% over the same period, to $ 78. Curve, which now costs $ 0.92, demonstrated similar dynamics in November.
DeFi tokens may continue to grow for the foreseeable future. This position is shared by the co-founder of EXANTE Anatoly Knyazev. But he clarified that positive dynamics in the past does not guarantee the same profitability in the future. Moreover, assets have already risen in price by hundreds of percent, so a correction can begin at any time.
Knyazev called DeFi tokens with the smallest amount of blocked funds, for example, Gnosis (GNO), as interesting investment options. You can also invest in market leaders, which include yEarn Finance (YFI), Synthetix Network Token (SNX), Balancer (BAL), Curve (CRV), UNI (UNI), Amoveo (VEO) and others. Knyazev stressed that it is important not to forget about diversification, so you can invest not in specific tokens, but in DeFi indices.
Currency.com analyst Mikhail Karkhalev suggested that the current growth in the DeFi sector is caused by the general positive in the cryptocurrency market. This can be used by early investors to sell assets, which can lead to a collapse or deep correction, the expert warned. He recommended hedging risks to holders of DeFi tokens or those wishing to buy them.
The DeFi market is now at an early stage of development, added Karkhalev. As practice shows, 95% of projects can cease to exist within a year. For long-term investments, those projects that can survive are of interest.
The expert attributed the Chainlink (Link), Maker (MKR) and Bancor (BNT) tokens to potentially interesting assets. These projects were created during the ICO and have experienced a colossal number of negative periods over the past 3-4 years, but they continue to develop, demonstrating sustainability. Karkhalev also singled out the leaders of the DeFi market – Uniswap (UNI) and Compound (COMP). But the vast majority of DeFi projects should be treated with great caution, the analyst said.
Alexei Markov, a leading trader at United Traders, admitted that the time has not yet come for the altcoin season, although it “will certainly be”. According to his forecasts, the second wave of growth in the DeFi sector can begin on the horizon of 2-3 months. Now is the “time for bitcoin”, and other cryptocurrencies or derivatives are unlikely to be able to catch up with it.
In November, DeFi tokens have risen in price by hundreds of percent. What coins to buy?
