YFI has grown from $7k to $24k in a short period of time. Can it rally back to $40k, or return to less than $10k? What are the fundamentals of this coin?
A few thoughts below:
- Market-wise, Bitcoin is still the leader. The other cryptos, including YFI, follow its trend. Furthermore, BTC is widely considered as a reserve asset
- YFI was officially conceived to have no value, and its fundamentals are weak: staking rewards for YFI are low, it is not conceived to become a currency, and yearn.finance vaults can be updated any time
- YFI is the most expensive coin because its total supply is only 30k, increasing its unit price. But its market cap is very far away from BTC
- Why is YFI increasing now? Maybe because DeFi fans are looking for other investments after the end of Uniswap farming. So some of them go to Sushiswap, and if you look at the best pairs regarding APY in Sushiswap, you will see ETH-YFI in the top 2, with an APY of 38%
- Should I buy YFI or BTC? From my standpoint, hodling BTC makes sense for long term, whereas YFI is only speculative, due to its high volatility