Aave’s token drops 15% as the recent market crash affected multiple coins with LEND losing a huge chunk of its value in less than a day as we are reading more in today’s altcoin news.
The coin is still far above the level where it was a month ago but as Aave’s token drops, we can expect to see the price correct in the upcoming weeks. The cryptocurrency was benefiting from the Defi growth which has brought the asset from around $0.01 to $0.80 in a few months. LEND took a beating as Bitcoin and Ethereum dropped lower on Thursday as the leading decentralized finance coin dropped by 15% in the past 24 hours, underperforming most of the cryptocurrencies.
The strong correction took the market capitalization of the coin under $1 billion after it became the first DEfi coin to hit a milestone. LEND could drop even further now as it moves below the crucial support level. The price action could be directed by one of Bitcoin as analysts are divided over the future of the leading cryptocurrency because of the uncertainties about the macroeconomy and the legacy markets. The stock market crashed once again and will likely send Bitcoin reeling as it did back in March.
One of the best signals of PMF in #DeFi is if a project can succeed w/o extra incentives (liquidity mining). @AaveAave doesn't have LM yet it's still one of the biggest beneficiaries of new yield farming activity. At $1.26B TVL and only $759M mcap—the fundamentals are so strong. pic.twitter.com/wlAZywY6c7
— Spencer Noon (@spencernoon) August 20, 2020
LEND could continue its descent in the short-term as the crypto investors will rush for the exit and will centralize capital in Bitcoin. A lot of investors remain long on the Defi coin looking it from a fundamental standpoint citing Aave’s strong product-market fit. DTC Capital’s Spencer Noon noted that Aave has a lot of capital in the products which only suggests that the protocol found “PMF” which is what sets LEND from other tokens and the fact that it does not have liquidity mining processes that attract capital unnaturally:
“One of the best signals of PMF in #DeFi is if a project can succeed w/o extra incentives (liquidity mining). @AaveAave doesn’t have LM yet it’s still one of the biggest beneficiaries of new yield farming activity. At $1.26B TVL and only $759M mcap—the fundamentals are so strong.”
Mutlicoin Capital partner Kyle Samani made a similar comment saying that LEND will be the only coin that he will invest in, in the next two years:
“If I had to hold a single Ethereum based DeFi asset for 2 years, it would be $AAVE. By far the best combination of: product/market fit, token distribution, community, pace of innovation, and reasonable valuation with upside to go.”
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