The hype threat of "hot coins" in the bear market

 Since this time, DeFi is a hot spot in the circle. Both most popular projects are usually COMP and BAL. Included in this, COMP is the governance token of Compound, and BAL is the governance token of Balancer.

These two coins ushered within an unexpected surge at the start of their listing. Over time of precipitation, what's the current scenario of the two coins? Let's take a look at their recent styles:

Let's first look at the trend of COMP:

The shape above shows the currency price trend of COMP. It proceeded to go from 96 All of us dollars at the start of its listing on June 17 to quickly soaring to All of us$341 on June 22 and to US$176 on July 13 in less than a week. The price tag on the currency has dropped by nearly 50% from the highest point, and the purchase price has doubled since the start of the listing.

Let's look at the trend of BAL:

The image above is the currency price trend of BAL. It reached its highest price of 19.72 US dollars at the start of its listing on June 25, and went completely down, also it had dropped to 9.86 US dollars on July 13. The currency price has dropped by 50% from the highest point.

The trends of the two coins possess one thing in keeping, that is, they have dropped by 50% from the highest point, and the time of the drop is very fast. Both COMP and BAL just took regarding 3 several weeks to drop linearly. This suffices showing that at the start of the listing of these two coins, the price of the coins had been quite hyped, and their warm spots did not have solid sustainability.

I'm not sure whether the price of the two currencies will continue to decline in the future, but it will be very difficult to restore the peak once again for a while.

Because you may still find a lot of projects in the DeFi field waiting around to be detailed on the trade, and each task has a brand new gameplay, they will continue to attract the attention of investors, and funds will continue to chase hot spots. In cases like this, if a task doesn't have a high enough threshold to attract hot spots and funds, the currency price trend will quickly fall after a few years.

The same will additionally apply to another hot task NXM these days. Along with watching its fundamentals, we have to also pay attention to its currency price increase. Its currency price has risen by 4 moments in the last 2 days. In the short term, the price increase is so high, we must properly judge from the purchase price perspective whether it has long-term investment worth.

In my earlier analysis write-up, I once compared this type of DeFi token using the coins that were popular in the IEO trend in 2019. Each of them have a very important factor in keeping: they are all projects with extremely good fundamentals, however they possess overdrawn their future growth and anticipations at the start of the listing, which makes this type of currency from a price perspective for a while, such a high price isn't available Long-term expenditure value.

From the viewpoint of development possible, for the DeFi track, it is still in the early stages of growth. New projects are usually emerging one after another, and designs are constantly getting refurbished. Which of the patterns and improvements will genuinely have practical application worth and which can create great worth? The liquidity, actually which will turn into a unicorn, isn't necessarily visible in a brief period of time, therefore rashly placing a heavy wager on any task, especially when the currency price is high, there's a high risk .

For this reason I did not advocate that you invest directly in these coins in my write-up.

Although we should watch out for such token purchases with apparent traces of hype, we must pay close attention to this industry. Why? Because this industry is very likely to produce applications we can not imagine, there will be disruptive scenarios that people can't anticipate. In this process, we may encounter investment opportunities that are not inferior to Bitcoin and Ethereum.

In the expenditure industry, many people have noticed the old tale: Within the western United States by the end from the 19th century and the beginning of the 20th century, a major gold rush emerged. A lot of warriors rushed to the west to skillet for gold. Nevertheless, in the complete process, only a few people really produced a lot of money from gold panning. On the other hand, companies that offered gold panning devices and appliances produced a fortune from this trend.

You can find two typical locations here: one is marketing digging shovel, and another is selling gold panning overalls. The person who sells work clothing for gold mining not merely made big money, but also became a world-renowned denim huge: Levis.

So will there be a chance to earn money by marketing shovels and denim jeans on this DeFi tide? I believe there's one. You are ETH, which DeFi can't do without. Another one, we have to see which applications DeFi can't do without.

For ordinary investors, the easiest and most labor-saving way to grasp the tide of DeFi is still ETH.