price of $YFI reached an all-time high of $95,000 in May 2021 due to several factors, including its extremely limited supply (only 36,000 tokens in circulation) and the boom of the DeFi (decentralized finance) ecosystem at that time. This made it a highly sought-after asset due to its scarcity and its role as a governance token on the Yearn.Finance platform, which automates investment strategies to maximize returns on protocols like Aave and Compound.
However, its price significantly declined for several reasons. One of the main reasons was the decrease in enthusiasm for DeFi projects after their initial boom, accompanied by increased competition in the market. Additionally, excessive speculation inflated the price beyond sustainable levels, and when yields decreased and investors sought more liquid assets, the price fell. Changes in market conditions and potential mass sell-offs also contributed to its decline.
Currently, YFI remains relevant in the DeFi space, but its price reflects a correction more in line with its actual use and market demand. If you need additional details, I can help with more information.
