Yearn.Finance price might rebound betting on the advances in the DeFi sector and updates by the development team
The decentralised financial space has recorded huge growth in recent years. The DeFi market has created various services for users, making it easier to access the traditional financial services in the cryptocurrency market. However, DeFi has also created some money-making opportunities for the users.
Yearn.Finance is one of the platforms that provide excellent opportunities for people to make money in the DeFi space. Its importance in the emerging sector cannot be overstated, attracting the attention of thousands of traders within the crypto market.
With the cryptocurrency market currently in a bearish trend, several traders and investors are wondering how Yearn.Finance coin would perform. We would look at its price potential in June via careful analysis.
Yearn.Finance is an aggregator service for DeFi investors. The service uses automation to allow the investors to maximise their profit potential from yield farming. The major goal of Yearn.Finance is to make the expanding DeFi space easier for the investors who lack the technical skills or those who wish to be passive investors in the space rather than serious traders. It was previously known as iEarn, and it experienced massive growth in recent months as the DeFi space continues to expand.
Yield farming is also called liquidity mining. It is a way for users to generate rewards for holding their cryptocurrencies. To keep it simple, yield farming implies locking up your cryptocurrencies and earning rewards for doing so.
Yield farming is similar to staking, but it is way more complex. It usually works with users called liquidity providers (LP), and their job is to add funds to the liquidity pools.
The liquidity providers deposit their cryptocurrencies into a liquidity pool. The pool, in turn, powers a marketplace where the users can borrow, lend or exchange tokens. Using these platforms attracts charges, and they are paid out to the liquidity providers based on their share of the pool. Usually, the estimated yield farming returns are calculated using annual metrics, estimating the returns that an investor could expect over the course of a year. The Annual Percentage Rate (APR) and Annual Percentage Yield (APY) are the two commonly used metrics.
How has Yield.Finance Performed So Far this year?
YFI, the native token of the Yield.Finance platform has performed excellently so far this year, despite the current market condition. YFI began the year trading at $21,900 per coin. However, as the cryptocurrency market was on a bullish run, YFI’s price continued to rally, reaching an all-time high of $88,277 on 11 May. Thus, its price rose by over 400% within the space of five months.
However, the cryptocurrency market has been locked in a bearish trend since then, with several cryptocurrencies losing more than 50% of their value in recent weeks. YFI has also lost more than 50% of its value since its all-time high a month ago. Currently, YFI is trading at $38,301 per coin, which is a nearly 100% increase in price year-to-date.
YFI’s returns are not as glamorous as some of the leading cryptocurrencies. However, enjoying 100% profits in less than six months still makes it an excellent cryptocurrency.
What are the Events that Could Affect Yield.Finance’s Price in June?
Despite the low prices, the DeFi space continues to be active, providing services and spearheading developments in the financial sector. Recently, social investment platform eToro listed the YFI token alongside a few other DeFi tokens such as Aave, Compound and Decentraland.
The availability of YFI on eToro is huge news because it allows millions of traders using the platform to gain access to the DeFi token. With the cryptocurrency market in a bearish trend, YFI’s price hasn’t properly reacted to the eToro news. However, the cryptocurrency’s price could appreciate once the bullish run resumes.
However, the biggest news for Yearn.Finance came during the Bitcoin Miami conference. The Yearn.Finance developers talked about a lot of development that is coming to the network over the coming weeks and months.
The developers are working hard to implement a layer-2 solution on the Yearn.Finance platform. They want to add layer-2 to the vault, and although it would continue to run on the Ethereum blockchain, the vault would source liquidity via a bridge from the sidechain. The development team is also looking to add new products to its platform. The expected addition of insurance features would make the platform more appealing to DeFi users. Overall, there is a lot of development coming to the Yearn.Finance platform soon as the developers look to expand on the services they offer to users.
Yield.Finance Price Forecast for June
The YFI’s token price is performing in line with the broader cryptocurrency market. The current bearish trend has seen prices decline by 50% or more. Despite YFI’s excellent technical indicators, the coin is struggling to mount serious challenges to surpass the $50k mark.
After reaching a record high of $88k last month, the YFI/USD pair is currently trading below $39k at the time of writing. Although the price is down, YFI remains a favoured token, especially amongst DeFi users. The current negative sentiment in the market overshadows the excellent technical indicators, and it is the reason why YFI is struggling to perform well.
YFI/USD chart. Source: Coinalyze
The YFI/USD pair has defended the $24k major support point in recent weeks, allowing the cryptocurrency to continue trading above $30k. If the broader market could overcome this bearish trend, then YFI would get the needed support to push its price past the $50k mark for the first time in weeks. An extended bull run could see it aiming for the next psychological resistance point at $77k.
However, if the current bearish trend continues, YFI could find it hard to mount any challenge past the $50k mark soon. Regardless, establishing its strong support of around $24k could keep YFI’s price within the $30k and $40k regions for the next few weeks.
Please note, the above is a purely opinion-based piece, based on relevant data available. It should not be deemed as direct investment advice.