In a bull market, fundamentals are not your friend.

Author: Sam

Translated by: Deep Tide TechFlow

Those who try to chase high yields from ETH through DeFi tokens will be disappointed in this bull market.

The summer of DeFi taught us that value accumulation flows from ETH to DeFi projects. This is a logical conclusion, as DeFi is the most popular area within the Ethereum ecosystem.

However, it is now evident that the real high yields from ETH actually come from "established coins" (such as XRP, HBAR, XLM, ADA, TRX, ALGO, etc.). These belong to the B-list mainstream coins, with market capitalizations in the tens of billions, but lack the fundamentals to support their value. Their main drivers are the Lindy effect (i.e., the value of longevity) and the exposure from centralized exchanges (CEX), which makes these tokens a simple choice for non-crypto native users.

What we observe is that the high yields from ETH are now flowing into these large-cap "established coins," such as XRP, ADA, HBAR, XLM, ALGO, etc. These tokens have market capitalizations reaching the tens of billions, but there is almost no network activity to support their value. Their appeal lies in longevity (Lindy effect) and the convenience of being accessible to non-crypto native users through centralized exchanges.

This proves two points:

1) Fundamentals still do not matter. In a retail-driven bull market, income and usage metrics have minimal impact on token performance.

**2) Unless you have an asymmetric advantage in the small to mid-cap token space, holding leveraged ETH or large-cap mainstream coins is wiser than expecting mid-cap *DeFi* tokens to perform better.**

Since the summer of DeFi, the token market landscape has significantly expanded. With the increase in optional tokens, the risk of selection has also risen, making it more difficult to pick the right DeFi tokens and statistically yielding lower returns.

In a bull market, fundamentals are not your friend. Don’t be clever: keep it simple, and concentrate resources on betting on those obvious choices.

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