Balancer Hack Sends Price Tumbling
The recent Balancer hack has seen the price fall quite significantly, currently down over 25% within 48 hours. Balancer is a quality project and it remains to be seen how they will handle and deal with the effects of this unfortunate event.
Balancer is currently ranked 5th on DeFi Pulse, with $132 million locked up in the protocol.
In general it seems that the entire DeFi space is experiencing a pullback, which is quite healthy and to be expected. Compound is also trading significantly lower from it's recent highs of approximately $378! Currently, Compound is trading at $214, which could see it enter into a decent buy zone soon.
I think anything above $200 is still a bit expensive and I would be looking to pick up some Compound at approximately $175 to $200.
The current price action is busy creating a fresh opportunity for those who missed out on the initial pump but I would still be very cautious and only enter with a small percentage of my allocated lot. In the event that prices drop further, one can still average in and bring down your average entry price. I am still fairly convinced that Crypto markets in general are setting up for a small dump prior to further upside.
A drop now for the entire Crypto space would definitely pull the DeFi space along down with it and in my opinion, create the perfect entry point to accumulate some stellar DeFi projects at a bargain price. This is what I am waiting for! Part of my approach is to secure good entries even if I miss the occasional boat. It is important to remember that if you miss a move, you don't lose any capital. However, if you buy too high you loose capital and time.
What About The DeFi Index?
If you are one of my readers, you will remember a recent post where I discussed a new investment product from FTX. The product in question is the DeFi Index perpetual futures contract. The index tracks the price of the top 11 DeFi projects. You can find out more in my article "FTX And Their New DeFi Index - Gain Exposure To The Top 11 DeFi Projects!". As I suggested, the risk holding a basket of projects as apposed to holding one or two is a lot lower and now we have seen it actually play out.
If you look at the percentage drops of Compound and Balancer Compared to the DeFi Perp contract you will see exactly what I mean. The losses are a lot less and the volatility is to a large extent removed. The index is designed to slowly generate profit as the DeFi space grows. Personally, I believe this is the perfect product for the early days of DeFi. Once the space has matured some and there is more clarity and stability, an investor can take the profits accumulated from holding the index and focus on the proven gems!
Please remember this is not financial advise but rather my own personal views and actions in the market.