Some decentralized finance (DeFi) tokens are up more than 30%, according to one industry analyst, as traders expect the incoming Donald Trump administration to strengthen the “investment appeal” of holding “utility” tokens.
Uniswap (UNI) was one of the biggest winners, up more than 35% over November 6-7 to hit a local high of $9.58, followed by Lido DAO (LDO), Ethena (ENA), Aave (AAVE) and Maker (MKR). has risen. From local trough to high, it’s well over 20%, according to CoinGecko data.
“Until recently, DeFi tokens were labeled as ‘useless governance tokens’ that provided no value other than voting on protocol changes through governance voting rights,” said Charlie Sherry, financial and cryptocurrency analyst at BTC Markets. On Cointelegraph.
“But investors and token holders have been buying bets that one day these protocols will be able to deliver value back to the tokens through fees earned by the protocols.”
Sherry said many DeFi protocols have not implemented such “value generation mechanisms” because they feared enforcement action from the U.S. Securities and Exchange Commission, and pointed to the SEC’s investigation into Uniswap Labs as a textbook example.
Trump defeated Vice President Kamala Harris on November 6 and secured the US presidency. This outcome could lead to the resignation of SEC Chairman Gary Gensler as early as December or January, according to 10x Research.
Both of these together may have sparked a wave of “regulatory optimism,” Sherry said.
“(The) market is now pricing in expected regulatory changes and looking forward to a more hospitable environment for DeFi projects and their tokens.”
These are the best performing tokens over the last 24 hours. Source: CoinGecko
Explaining the value creation mechanism in more detail, Sherry said that lending and borrowing protocol Aave’s “fee conversion” proposal would be “an important step toward creating intrinsic value” for AAVE token holders.
Likewise, Sherry noted that a portion of fees from Uniswap’s new layer 2 Unichain will flow to UNI token holders. That is, “transforming UNI from a governance token to a utility asset and broadening its investment appeal.”
DeFi protocols behind LIDO, ENA, MKR, and Frax (FXS) could also see similar “value accrual” changes, Sherry added.
relevant: Ethereum is like the ‘Amazon of the 1990s’ — 21Shares
Meanwhile, Markus Thielen, head of research at 10x Research, said DeFi tokens may have risen because some traders have adopted a “buying laggards” strategy, buying assets that have underperformed compared to the previous year, which could lead them to be leaders the following year. said.
There is also speculation that BlackRock will promote a spot Ether (ETH) exchange-traded fund “more aggressively” in 2025. Thielen told Cointelegraph.
Thielen said Ethereum could reach $3,000 if it exceeds the $2,700 level.
Ether is currently trading at $2,845, up 8.5% in the last 24 hours.
magazine: The proposed changes could save Ethereum from the L2 ‘roadmap to hell’.