The price de Yearn Finance (YFI) has been in a serious crisis for the past 2 weeks and many in the crypto community blame Sam Bankman-Fried for the sharp correction (SBF), the CEO of Alameda Research and FTX.
Last month, YFI, the huge domestic token DeFi Yearn.finance, is down 62.7% from $ 43,970 to $ 16,360.
As Cointelegraph reported, Most DeFi tokens were corrected between 40% and 60% in September. This sale took place as Bitcoin and Ether (ETH) prices also fell.
In the past 40 days, the price of Ether has dropped from $ 488 to just $ 308. This weakness in the highest valued altcoin by market capitalization further exacerbated the decline in DeFi tokens.
Why is Alameda short at YFI?
In the last week There have been several reports that Alameda Research is short with the YFI.
Alameda, which calls itself a quantum trading company, is considered one of the most successful crypto trading companies.. In November 2019, Bloomberg reported that Alameda handles 5% of the volume of the cryptocurrency market and trades up to $ 1 billion per day.
October 11th SBF confirmed on social media that Alameda is short at YFI. However, SBF emphasized that YFI’s price has not fallen.
According to SER Alameda had just under 200 YFI net. This equates to approximately USD 3.28 million at a price of USD 16,400. However, the exchange manager said it wasn’t enough to bring the price of YFI down. He said What:
“SBF applied to YFI for a loan that destroyed its price, sold it on Binance and other exchanges. And when it was caught, YFI rose again.” This is wrong. 200 YFI net in a few days does not destroy it! This is an order of magnitude out of place. The impact was not great. “
SBF added that too The YFI, “borrowed” on Cream, a DeFi protocol, was not used to shorten the cryptocurrency.
Much of the negative sentiment surrounding SBF’s YFI short position was based on speculation that SBF had taken.
Bankman-Fried denied the speculation and stated so “Most of the YFI was borrowed for cash and agriculture, not for sale or short sale.”.
For a company the size of Alameda, a $ 3.28 million position is likely a hedge against the market.
In the last week, Bitcoin and Ether have increased significantly while DeFi tokens have been flat overall.
Due to the trend that large cryptocurrencies outperform smaller DeFi tokens, The YFI short could be a short term hedge.
YFI Mega Raise Over?
The price of YFI continues to drop significantly from its high of $ 43,966. However, this does not mean that the project lacks solid fundamentals.. The team is currently preparing to release its Yearn v2 safes, a major improvement on their popular safes. Once active, DeFi users can make returns on the vaults by putting their tokens in the vaults.
According to Stats.finance, As of October 12, Yearn vaults have approximately $ 813 million of capital stored.
Despite the upcoming product launch The recent controversy surrounding former YFI backer Blue Kirby and YFI’s continued price drop has led some traders to be cautious about the future of the project.