According to Denis Vinokurov, analyst at the brokerage company Bequant, the decentralized finance market remains underestimated, which potentially indicates a possible explosive growth this year.
DeFi-related coins such as COMP, AAVE, KNC and ZRX all hit new all-time highs in the past 24 hours. Compound governance token reached $500, rising in price by 20% within a day. Since the beginning of the month, Compound added 40%. According to CryptoCompare, the token jumped 130% in January 2021. AAVE, token of the eponymous DeFi lending protocol, also rose 21%, reaching a record price of $545. The ZRX token of decentralized exchange Ethereum-based 0x jumped by 102% in a day, reaching a historic high of $2.5.
According to Denis Vinokurov, head of research at London-based brokerage company Bequant, most DeFi coins have shown significant growth in recent days, which is a potential sign that investors expect a significant increase in profits from decentralized exchange (DEX) tokens and other DeFi solutions. Vinokurov believes that DeFi coins look undervalued, and as an example compares the market capitalization of bitcoin with the market value of Uniswap, the largest DEX platform by trading volume.
“While Uniswap has a market cap of $6 billion and an annualized revenue of $1.1 billion, bitcoin’s market cap or valuation of $700 billion is significantly higher than the annualized [miner] revenue of $1.5 billion,” Vinokourov told CoinDesk.
Thus, DeFi tokens have significant growth potential. William Noble, Chief Marketing Technician at Token Metrics, expects DeFi coins to repeat bitcoin’s 2017 bullish rally this year.