Recently, new coins (ACT, PNUT) have dropped quite severely, reminding me of the golden pits of the DeFi era. Back then, in September and October 2020, the market was hit hard, especially DeFi projects represented by UNI, which were directly criticized. However, the first wave of the bull market ultimately started from the DeFi sector. Trends are worth believing in.
As long as there are continuous hotspots on the chain that bring about wealth effects, significant funds in the secondary market will pull benchmark projects. Once secondary funds lead the trend, more hot money will flood in on the chain to chase the next wealth effect. This relationship is a mutually reinforcing cycle.
I still remember when UNI, SUSHI, and YFI plummeted, new DeFi projects were still continuously emerging on the chain. The current situation is similar; regardless of how new meme coins in exchanges drop, the on-chain activities are still thriving.
Next, which track will the funds choose to pull out the trend first? The answer is quite obvious. Only after the first wave of trends is completed will it be the turn for other narratives to take the stage. Just like the last round of NFT, metaverse, and GameFi Ponzi projects, they all started performing only after DeFi finished its run.
