Weiss Crypto Ratings, an analytics agency working in cryptocurrency and classic asset rankings, has revealed its evaluation of the hype around decentralized financial applications and their tokens.
According to the experts, this hype should be treated as a 'mini bubble' rather than a 'bubble'. This process won't hurt the progress of the crypto and blockchain segment at all. The euphoria around investments in initial coin offerings (ICOs) that excited tokenholders in 2017 was provided by way of example.
Experts remembered that 'ICO mania' didn't hurt the industry in 2017. Furthermore, a lot of great cryptocurrency products became popular during this period. Actually, there is a couple of projects from the ICO era that are live and valuable now, i.e. the Cardano (ADA) blockchain platform and Bancor (BNT) liquidity protocol.
However, there is one group of market participants who shouldn't get too excited about investing in DeFi assets. Newbie traders may get hurt, and this is the essence of the majority of bubbles.
Weiss Crypto Ratings admitted that
the only thing bubbles do is make inexperienced traders lose their shirt
Will DeFi bubble surpass ICO mania?
The competition between ICO and DeFi in terms of impact on the industry, on the Ethereum (ETH) price and the overall cryptocurrency market capitalization is widely discussed by experts in the community.
Seasoned researcher, ex-Messari Qiao Wang foresees that DeFi assets may push some crypto behemoths out of Top-10 crypto market caps. According to him, XRP, Litecoin (LTC) and Bitcoin SV (BSV) might leave the elite club.
Three Arrows Capital CEO/CIO Su Zhu predicts that interest in DeFi will be a much more powerful catalyst for the Ethereum (ETH) price than ICO mania was. The investor insists that the decentralized finance sector is both accretive and sustainable at the same time while coin offerings completely lacked both characteristics.
The majority of community members are still very far from understanding the power of the DeFi rise and its potential influence on top blockchain ecosystems, Mr. Zhu added.