Yearn Finance YFI Token: What Caused the Sudden Price Plunge
The Yearn finance YFI token experienced a shocking drop, plummeting over 43% in just five hours on November 18. This rapid decline caught many by surprise, especially after the token had rallied nearly 170% earlier in the month. The big question on everyone’s mind is: Why did Yearn Finance crash? Was it a deliberate price adjustment or the beginning of a rug-pull?
Yearn Finance Crash: YFI Price Drops Suddenly
The sudden drop in value resulted in a loss of over $300 million from its market capitalization, a significant setback from its gains earlier in November. Currently, the YFI token is trading at a value of $9,178, down from around $14,000 just a day earlier. Despite this decline, the token’s value is still reported to be up by 87% over the past 30 days, according to the latest data.
Why Did Yearn Finance Crash?
Following the drop, discussions were rife with fear, uncertainty, and doubt (FUD) among investors and enthusiasts. Speculation about a potential exit scam circulated on social media platforms, with concerns raised about nearly 50% of the YFI supply being concentrated in just 10 wallets allegedly controlled by the developers. However, a review of Etherscan data suggested that these wallets might belong to cryptocurrency exchanges.
Will YFI Reach $0?
Amidst the turmoil, some users speculated that the initiation of short positions could have catalyzed the token’s rapid devaluation. Coinglass data indicated a surge in open interest for YFI, hinting at increased shorting activity following the token’s gains in November. One trader commented on buying the dip after a massive sell-off, which may have contributed to the drastic price drop. Another user pointed out that the post-decline price behavior of YFI was atypical for exit scams, adding another layer of complexity to the situation.
What is Yearn Finance Crypto?
Yearn.finance, the platform behind the YFI token, is a decentralized finance (DeFi) protocol known for offering automated trading solutions in the DeFi markets. It was launched in July 2020 by Andre Cronje, an ethereum developer and entrepreneur, and has since been a notable player in the DeFi space.
### News source: cryptoticker.io