The market crash, is it a crisis or an opportunity?


1. The fixed investment can be continued within ETH 400 USD.

2. High-quality DeFi projects can be ordered to buy.

From yesterday to today, the market once again ushered in a sharp drop, this time including mainstream coins Bitcoin and Ethereum are not spared.

As of the time of writing, Bitcoin has fallen to about $10,400, which is close to the $10,000 mark; Ethereum has fallen to about $340, which is only one step away from $300. And all kinds of DeFi tokens are even more horrible. YFI has fallen to 25,000 US dollars, and it has fallen by about 40% from the high of 40,000 US dollars. The most legendary project has fallen so tragically, not to mention other DeFi tokens.

The media have various interpretations of this. Some say it is affected by the upcoming second new crown epidemic in Europe, some say that the regulators are preparing to tackle the recent DeFi boom, and some are related to the latest news. The avalanche agreement, in my opinion, these reasons are far-fetched, and they are not the root cause.

Regarding the negative market situation, we only need to pay attention to one point: whether the fundamentals of the market have fundamentally deteriorated. If the fundamentals of the market have not deteriorated fundamentally, then the decline in the market is a normal callback, and there is no need to worry too much. This kind of callback is a good time for us to deploy high-quality projects.

In terms of mainstream currencies, it is clear that neither Bitcoin nor Ethereum has any real bad news. Not only is there no bad news, but there is a good news:

According to data from the Bitcoin blockchain explorer, the difficulty level of Bitcoin mining set a new record at 5:55 am UTC on September 20, reaching 19.314T. Since January 2020, the difficulty of Bitcoin (BTC) has risen by 40%.

We all know that Bitcoin has not had any particularly exciting market this year. This shows that Bitcoin miners have not reduced their enthusiasm for mining because of the sluggish market, but have continued to invest in mining.

Miners are not worried, and we ordinary investors have no reason to worry.

In terms of DeFi, I mentioned in an earlier article that the real DeFi crisis is a subprime mortgage crisis similar to that in 2008. As long as that crisis does not occur, we don’t have to worry about the fundamentals of DeFi at all.

There is no problem with the fundamentals of DeFi, so will the current price of DeFi be inflated? The criterion for my judgment is still market value.

In the article “DeFi: Comprehensive Test Ground for Various Digital Currency” on September 9, I once wrote:

“The market recognition of BCH, BSV, Litecoin and Ripple is unknowingly dissipating. It was subtly swallowed by Ethereum DeFi”.

BSV was still in the top ten back then, and now it has been dropped out of the top ten. The remaining BCH, Litecoin and Ripple coins are also quite limited in value and prospects in my opinion. Their stories have already been told, and sooner or later they will be thrown out of the top ten. And it is likely that this round of DeFi tokens will replace their top ten rankings.

After this period of development, it is obvious that at least three areas of DeFi have become the infrastructure of the blockchain public chain: decentralized exchanges, lending and asset synthesis.

And the typical projects Uniswap, Aave and SNX in these three fields, their current total circulating market value ranks 38, 31 and 42 respectively.

As infrastructure project tokens have not even entered the top 20, this situation is abnormal, so I think that their token prices are not currently in bubbles, and the same is true for other well-known DeFi projects.

If the current sluggish market continues for a period of time, I believe that a large number of investors will abandon the messy imitations, re-understand the value of these well-known project tokens, and refocus their funds on these projects.

So what should ordinary investors do in the current market?

1. If the Ethereum is still less than US$400, you can continue to invest in Ethereum.

2. The amount of funds is sufficient, and the ratio of Bitcoin and Ethereum is above 50%. You can use the excess funds to allocate some well-known DeFi project tokens and buy them in installment. I think the following projects are all well qualified: Compound, MakerDAO, Uniswap, Balancer, Curve, YFI, AMPL, SNX, Aave, UMA.


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