Recently, new coins have dropped sharply (ACT, PNUT), reminding me of the golden pit of the DeFi era. Back 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 was ultimately launched from the DeFi sector; trends are worth believing in.
As long as there are continuous hotspots on the chain that create wealth effects, large 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 beneficial cycle.
I still remember when UNI, SUSHI, and YFI plummeted, new DeFi projects kept emerging on the chain. The current situation is similar; no matter how the new meme coins in the exchange drop, the activity on the chain is still vibrant.
Next, which track will the funds choose to lead the trend? The answer is actually very clear. It will only be after the first wave of the trend is over that other narratives will take the stage. Just like the last round of NFT, metaverse, and GameFi Ponzi projects, which only started performing after DeFi had its turn.
