Widely followed crypto analysts say Aave, a decentralized borrowing and lending protocol, should skyrocket once the bear market is over.
In a new video, Guy, the host of the pseudonym Coin Bureau, tells his 2.08 million subscribers that AAVE remains undervalued during the current market downturn.
“Today, Aave’s Ecological Reserve holds only 1.7. According to Etherscan, 1 million AAVE. On the demand side of this economic equation, Etherscan has an ever-increasing number of AAVE token holders. I think this is because the price of AAVE token stickers has fallen sharply, making it more attractive to paying attention investors. At the top of the market.
In that regard, in the previous video, Aave wasn’t undervalued because the ticker price was high when AAVE was there, and it’s still undervalued because its market capitalization is a quarter of the total. I couldn’t help noticing the comments. A value locked by the Aave protocol. Always keep in mind that it is the market value, not the market value, that matters. “
Guy says the new Aave stable coin, GHO, will increase demand for crypto assets.
“What are you doing [matter] There is a relatively shortage of demand drivers for AAVE tokens. The usefulness of AAVE tokens is currently limited to governance and staking, and while the risk is slightly higher, it offers clearly attractive rewards compared to alternatives.
The silver lining is that most of Aave’s supply is in circulation. This means that there is not much selling pressure left. This seems to be the reason for allocating interest rates from GHO’s Stablecoin to Aave’s Treasury. This reduces the selling pressure on AAVE tokens and guarantees the life of the protocol.
With the introduction of GHO Stable Coin, Aave stackers will be able to create GHO at near zero interest rates, which should increase the demand for AAVE. The caveat is that as more staking Aaves increase, the overall staking rewards will be diluted, potentially weakening Aave’s second demand driver. “
Analysts said several factors, including energy and supply chain disruptions, rising interest rates, and rising circulation, have reduced Aave’s value by more than 70% in January, with potential selling pressure worth $ 40 million. Said that it brought.
Guy said the current recession will have minimal impact on Aave’s prices from demand drivers, but expects the situation to change once the bear market is over.
“The harsh reality is that future improvements in Aave’s demand will not change the fact that we are currently in the crypto bear market, but Aave tokens will rise to astronomical heights when the next bull market arrives. It helps to do so, especially when GHO’s stablecoin is fully adopted. “
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