After going through a deep pullback in the past month, most of the DeFi tokens struggle to let go of the losses.
Although the news of Square buying $50,000,000 worth of BTC has sent the market into a tisy, not all coins are moving out of the red. Coins like UNI (+22%), LRC (+13.5%), and KNC (+5%) are recording some gains. DeFi darling YFI has manged to dig itself out of the deep red into the green (+5%).
Much like the price, the total value locked (TVL) in the DeFi Sector has declined by almost 10% to $10.12 billion, as per DeFi Pulse.
Popular DEX Uniswap, however, is an exception to this, whose TVL has jumped 30% in a fortnight.
Keep on Dumping!
As we reported, numerous popular DeFi tokens have lost 80% to 90% of their value since hitting all-time highs during the period of mid-August and the beginning of September.
But still, they continue to go down more and more, which could be seen as an opportunity for the project enthusiasts to buy these tokens at low prices which might have missed them the first time around.
In the past 7 days, more losses have been incurred by the DeFi sector, with YFII leading with almost -46% drop. Other notable losers include SUSHI (-41%), CRV (-37%), YFI (-29%), SWRV (-33%), bzrx (-37%), UNI (-24%), UMA (-25%), LEND (-20%), and SNX (-17%).
As another round of losses hit DeFi tokens, Twitterati points to derivatives exchange FTX CEO Sam Bankman-Fried shorting YFI, CRV, and UNI.
Some market participants speculate that Bankman-Fried might be behind the latest dose of losses, especially for YFI, CRV, and UNI, which he has been dumping on leading spot exchange Binance.
It is worth noting that Bankman-Fried is also the CEO of the quantitative cryptocurrency trading firm Alameda Research.
While some aren’t liking it, others said Bankman-Fried is simply shorting a few cryptos, which means he believes the coin will decline in value.
Jason Choi of crypto fund The Spartan Group found it all absurd, stating, “Always find it amusing that the idea of shorting is deemed evil on crypto twitter.”
And if you think Bankman-Fried will short his FTT or SRM, that’s a big fat no, because he ain’t short on his creation, of course, rather he is “long as fuck.”
Trader Moon Overlord also pointed out the obvious nature of the situation, which is “a person apart of a trading firm does a trade.” Back in late August, when FTX acquired the crypto portfolio tracker Blockfolio, the trader said, “FTX didn’t pay for a portfolio tracker they could build in 5 minutes they paid $150M for your data and bag info.”
The market also likened Sam’s behavior with billionaire investor George Soros acting as a catalyst in collapsing the British pound in 1992 by shorting it.
In the process, Soros made an estimated $1 billion profit. While that incident was viewed as “a permanent black mark on the UK as a center of financial prestige,” following the event, “Britain entered a period of growth and prosperity,” noted Sahil Bloom, VP at Altamont Capital Partners.
If not Soros, someone else would have used the opportunity to their advantage, and he “merely accelerated” the process. The same could be seen in the DeFi market, which may finally find its bottom and embark on a new bull run.