How to invest in DeFi projects in 2021?
In yesterday’s article, I shared with you my long-term views and investment strategies on the top DeFi tokens: that is, the long-term is optimistic, and as long as its fundamentals do not deteriorate, I will always keep a part of the position.
But as I have emphasized many times, even if any token has long-term potential, its price rise will not be achieved overnight, but will rise and fall periodically and spirally: in a bull market, it will rise to an absolute peak Most investors think it is only higher but not the highest, and in a bear market it will fall to the point where most investors think it is only lower but not the lowest.
The same is true for the DeFi tokens in the head.
So how should we look at the current position of the various top projects of DeFi?
The position of the DeFi project is inseparable from the trend of the entire digital currency market, so we must look at the current trend of the overall market.
In my opinion, the current market is still only in the early stages of a bull market. The basis for my judgment is that although Bitcoin has reached a new high, Ethereum has not yet broken through the previous round of highs. This means that all the top DeFi project tokens will go forward with the bull market in the next few months, as long as their fundamentals do not deteriorate fundamentally, they are very likely to continue It is entirely possible to increase, to increase by 2 times, 3 times or even more at the current price.
Therefore, many investors are concerned: I bought XXX coins at XXX price, can it rise to XXX price? My reply is that as long as you buy a top project, you can basically estimate whether it can rise to the price you expect based on this valuation.
But it should be noted that this is only an estimate, not a conclusion, and it only represents my personal general judgment. Only time will be able to witness what the market will eventually come out of.
In the early question and answer, I have given the price of the three tokens: Maker is within $600, UNI is within $5, and CRV is within $2.
As of writing, Maker has risen to $1,400, UNI has risen to $5.88, and CRV is $0.73.
Maker and UNI have exceeded the fixed investment price. I believe that these two coins will continue to do well in this round of bull market and break through the highs they have set. CRV will also go well, but whether it can break through the previous high of $11 in this round of bull market is hard to say; but if we extend the timeline and focus on the next round of bull market in a few years, I believe that as long as it As long as the fundamentals of the stock market continue to maintain their current strength, it is very likely that they will break through $11 in the next round of bull market.
Therefore, if investors who bought some top project tokens at a high level in the early stage can bear the time cost, even if they cannot get rid of their set in this round of bull market, there is a high probability that they will be able to get out of their set in the next round of bull market, so there is no need to worry too much psychological pressure.
Investors who have not yet bought the top DeFi tokens now buy the tokens of the top projects. Although this price is high compared to their previous prices, compared with the next trend of the bull market, it is even the same as In the next round of bull market, the price they may come out of is not high, but the room for upside has been greatly reduced. Therefore, if you are willing to endure a short-term lock-in and can accept a relatively limited rate of return, you can still buy now, but you must pay attention to position control and do not invest heavily in gambling.
For investors who have always insisted on regular investment in DeFi tokens, I think that if their current price has exceeded the fixed investment price, they should stop chasing it. Those who have not exceeded the fixed investment price can continue to make regular investment. We calmly waited for the market to reach a climax in the second half of the year, and then began to sell and cash out in batches according to the market conditions at that time.
So which projects are the head projects with relatively high certainty? I conservatively think there are these: YFI, Maker, Aave, Compound, SNX, UNI, BAL, CRV. There are other projects with very good potential, but their positions are not as strong as these few.
