The Daily Gwei - DeFinitely Wrong - The Daily Gwei #483
DeFinitely Wrong - The Daily Gwei #483It's usually the most popular narratives that end up being wrong.There was a time when pretty much everyone in crypto was in agreement that so-called “DeFi tokens” were going to grow to a point where they entered the top 10 cryptoassets by market cap. Well, obviously that never came to fruition and pretty much all DeFi tokens have lost a lot of value against both USD and ETH - disappointing both true believers and speculators alike. The thing is - this belief that DeFi tokens would perform well wasn’t unjustified - it was born out of DeFi summer of 2020 where many of these tokens went absolutely nuts. I’m sure those who were around back then remember just how crazy the YFI pump was - from basically $0 to $43,000 in less than a month. And it wasn’t alone in the craziness - many other tokens returned 10-100x (or more) within the 3 month period that was DeFi summer. Though DeFi summer inevitably ended and the tokens came crashing down - since then none of them have reached their all time highs against ETH again and only went up in USD during the last couple months of the bull market (leading into May 2021). So, what can we learn from all of this? Well, it’s probably best not to take a 3 month period in time and extrapolate that out to form a long-term thesis on any asset. I mean, if you did this for every asset then we’d all be long-term bullish on the outright scams which do very well at the tail-end of a bull market but then collapse shortly after. Even outside of the scams there are plenty of examples of assets that people were extremely bullish on for a few months but then the hype-cycle ended and these assets faded into irrelevancy. Lastly, I think what a lot of people miss are that DeFi tokens are essentially tied to on-chain businesses and so these tokens are viewed as an “equity” in these businesses. If the business is doing well by generating profits, then it would follow that the token should increase in price eventually (especially if some of those profits are flowing back to token holders). Though if the business is doing poorly (of which many DeFi businesses are), then the token has no reason to increase in price and every reason to fall in price (especially if it is already highly valued). All of the above isn’t to say that DeFi tokens are uninvestable - far from it - but it is to say that picking the winners is really hard (just like picking non-crypto business winners). To pick a winner requires lots of research, patience, experience, conviction, maintaining a position (aka not blowing yourself up) and, of course, a little (or a lot) of luck. Have a great day everyone, Enjoyed today’s piece? I send out a fresh one every week day - be sure to subscribe to receive it in your inbox! Join the Daily Gwei EcosystemAll information presented above is for educational purposes only and should not be taken as investment advice. If you liked this post from The Daily Gwei, why not share it? |
Older messages
Fruitful Debates - The Daily Gwei #482
Monday, May 16, 2022
Sometimes good debates can actually be had on Twitter.
The Protocol Guild - The Daily Gwei #481
Friday, May 13, 2022
Sustainably funding Ethereum's future.
Gang Violence - The Daily Gwei #479
Thursday, May 12, 2022
The regulators are coming whether we like it or not.
Fallout - The Daily Gwei #480
Thursday, May 12, 2022
It's finally time to accept reality - the party is well and truly over.
A Terrable Day - The Daily Gwei #478
Tuesday, May 10, 2022
Another one bites the dust.
You Might Also Like
100k signatures can trigger Swiss national referendum on adding Bitcoin to country reserves
Monday, April 22, 2024
If the Bitcoin advocates' plan succeeds, Switzerland could become the first country in the West to embrace the flagship crypto asset. ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏
Crypto Market Pulse Weekly - ₿ Bitcoin Halving Sparks Frenzy as Runes Protocol Launches
Monday, April 22, 2024
Bitcoin completed the fourth halving on 20 April. Runes protocol launched on Bitcoin causing record fees. $7.5bn. SingularityNet, Fetch.ai, and Ocean Protocol AI merger approved. ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏
Impressions of the Hong Kong Web3 Conference: Exchanges fade, few excellent projects, KOL influence strengthens
Monday, April 22, 2024
Author | @tmel0211 Editor | Wublockchain Original link:https://x.com/tmel0211/status/1777871689092923636 After spending three days at the Hong Kong Web3 Conference, I have many thoughts that words
The 2024 Bitcoin Halving Has Successfully Been Completed
Monday, April 22, 2024
We bring you the top stories in crypto every week! Stories like... Monday April 22, 2024 Sign Up Your Weekly Update On All Things Crypto TL;DR The 2024 Bitcoin Halving Has Successfully Been Completed
From 2012 to 2024: Analyzing market conditions before each Bitcoin halving
Sunday, April 21, 2024
As the fourth Bitcoin halving approaches, an in-depth look at past events offers insights into potential market impacts. ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏
Asia's weekly TOP10 crypto news (Apr 15 to Apr 21)
Sunday, April 21, 2024
1. Japan's Liberal Democratic Party Releases 2024 Web3 White Paper link Last week, the ruling party of Japan, the Liberal Democratic Party (LDP), released the 2024 Web3 White Paper. The paper calls
Investigating the Bitcoin Halving
Sunday, April 21, 2024
CRYPTODAY 134 ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏
FTX investors agree to drop civil lawsuit against SBF if he snitches on celebrity promoters
Saturday, April 20, 2024
A settlement could see Sam Bankman-Fried assist plaintiffs in court. ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏
This week, Kraken launches its own Web3 wallet.
Saturday, April 20, 2024
April 20, 2024 | Read Online This Week In DeFi – April 20 fb tw in email Happy Friday, DeFi readers! Today's edition is our last hurrah as DeFi Rate before we merge with Milk Road starting Monday!
May(or) May Not? | BanklessDAO Weekly Rollup
Saturday, April 20, 2024
Catch Up With What Happened This Week in BanklessDAO ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏