Ethereum Coins Drop Amid Crypto Market Correction
Ethereum-based decentralized finance coins are being hit especially hard by the ongoing crypto market correction.
According to CoinGecko, a swath of the top cryptocurrencies related to the sector are down by a lot over the past 24 hours: UMA has dropped 38.9%, BAND has dropped 34.5%, LEND has dropped 24.9%, Nexus Mutual has dropped 23%, Compound has dropped 21%, and much more.
Ari Paul, founder of Blocktower Capital, recently argued that the DeFi space is currently undergoing a parabolic collapse:
Crypto trader Qiao Wang has also noted that the SushiSwap exit will likely cause a “DeFi mini-winter” as capital exits the space.
Room to Grow
The DeFi space arguably has room to grow, which suggests that this pullback may just be a temporary move before an eventual return to a bull trend.
Andrew Kang, a crypto analyst and investor, noted in July that the way in which DeFi was positioned indicates the sector has lots of room to grow in the future:
What threatens the Ethereum ecosystem’s growth in the longer term, though, is a high transaction fee environment.
Jacob Franek, a co-founder of crypto data and analytics company Coin Metrics, recently noted that the extremely high transaction fees Ethereum users have been incurring could result in a natural hard cap to the bull run:
This may not be a longer-term concern if there are solutions like those proposed by Ethereum’s developers. But for the time being, it is a concern, especially as the blockchain’s developers target more retail-centric users with new applications.
Featured Image from Shutterstock Price tags: ethusd, ethbtc, Charts from TradingView.com Top Ethereum DeFi Coins Dive 25% Or More Amid Crypto Correction
Originally from Bitcoinist.com https://ift.tt/2ZaQUWI
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