YFI Price Rises 46% in Just Four Days After Yearn Finance Buy Back $ 7.5M
Yearn Finance (YFI) has proven to be one of the top performing projects in the crypto market this week, rising more than 46% to over $ 29,100 in return in just four days and hitting a two-week high.
Daily price chart showing a 4-day rally in YFI / USD | Source: TradingView
The main rise of Yearn Finance occurs when Disclosure Buy back 282.40 YFI at an average price of $ 26,651 – over $ 7.5 million total in November. This is the result of a community vote to improve the profitability of the YFI token.
In addition, Yearn Finance saves think that You have saved more than $ 45 million on coffers and are getting “higher returns than ever”. Therefore, Yearn Finance can use returns in the future to buy back even more YFI tokens.
A partner in Cinneamhain Ventures venture capital fund, Adam Cochran notice that Yearn Finance makes approximately $ 100 million annually from fees alone from Vault, its flagship smart savings account service that maximizes the cumulative value of digital assets on deposit.
Cochran also noted that Yearn Finance was valued at over $ 5 billion (TVL) with a market cap of $ 1.18 billion at press time. That means the Yearn Finance protocol earns one of the highest fees per TVL, which gives it enough liquidity to sustain its YFI acquisition strategy going forward.
TVL in the Vault of Yearn Finance | Source: DeFi Lama
YFI is undervalued
Cochran compared Yearn Finance’s Return on Sales (P / S) and Return on Earnings (P / E) to another “payment-based” protocol, Curve, and found that YFI is still undervalued compared to Curve’s staking token CRV.
Specifically, the P / S ratio indicates how much investors are willing to pay for a company’s share based on sales per share. The P / E ratio shows an investor’s decision to buy stocks based on a company’s past or future earnings. In either case, a lower value indicates an undervalued stock.
“Their P / S ratio is 3.6x and their P / E is 7.9x,” wrote Cochran of Yearn Finance, adding:
“Those numbers for other yield-based protocols like Curve are 71.9x and 143x, respectively.”
The next $ 40,000?
Yearn Finance’s decision to repurchase more than $ 7.5 million in YFI, while driving YFI price higher, also fueled historical accumulation.
The $ 18,500 to $ 20,000 range has been attracting people to buy the dip since November 2020. It was also maintained versus the bears in September 2020, causing the price to rebound to $ 40,000.
Three-day frame YFI / USD price chart with fakeout area | Source: TradingView
If the YFI holds the $ 18,500 to $ 20,000 range as support and continues to climb above $ 24,580, or the 0.786 line of the Fibonacci retracement on the graph above, its next upside target would be $ 40,000, an upside target.
Famous Cuban crypto trader notice that YFI’s Fully Diluted Valuation (FDV) is just over $ 1 billion, which “is bad when you consider the potential and the team behind it.”
“I think we are on the cusp of a booming first quarter and a lot of people will no longer be on the sidelines after the risks have subsided towards the end of the year.”
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