Just Buy the DeFi Dip | SNX and RUNE

This morning I went out and bought some more RUNE and SNX. A few days ago I wrote a post about why RUNE has become staple in my longer term portfolio.

While I've been diving into the fundamentals of RUNE, I've also been trading the ranges. Any time we dip below $0.50, I start to slowly leg-in and add to my position.

In the short-term, I take some profits when we see an uptick. On September 26/27 I sold some RUNE on the way up: once at ~$0.51 and again at ~$0.59.

I still have my long-term position and continue to add to it, but trading these ranges on active DeFi coins has been an easy move for me. These coins make 20% roundtrip moves like clockwork.

SNX is another coin that I like for these wild swings. @nealmcspadden also wrote a post about SNX earlier this week and how he finds the volatility to be a great environment for active trading.

This morning, I bought some SNX at $4.334 / SNX. To me, this is a 100% short-term play. While I like the fundamentals of the Synthetix platform, I haven't had time to really dive deep enough to make it a long-term holding. When I get some more free time, I may look into it more closely.

Synthetic assets are going to take the traditional finance industry by storm. If you think DeFi is interesting now, just wait until trading things like TSLA or even bonds becomes a mainstay.

Trading The DeFi Trend

The DeFi industry in general is simply so young. We're seeing the tip of the iceberg in terms of what's possible. Right now you can do simple swaps in a decentralized way, become an AMM (automated market maker), take out collateralized loans, loan our your crypto, etc. The DeFi boom is just getting started - IMO.

RUNE and SNX are 2 of the coins I'm trading as they track the general DeFi trend well. There are, of course, other coins that track the overall DeFi market well, but these are two that I've found to be volatile and yet correlated enough to make sense for quick trades.

RUNE also has the dual benefit of being something I wouldn't mind holding on to for 12 months+.

You'll notice that all these charts are very similar. ETH, of course, tracks the overall trend in DeFi well. I don't trade ETH all that actively because:

1. I already have a big long-term position
2. Other coins like RUNE/SNX have better volatility

The general pulse on the DeFi industry is that the majority of hardcore development is happening around capital efficiency and scaling. Fees are one of the major issues holding back the whole industry and ETH 2.0 still seems to be far in the distance.

While we wait for ETH 2.0, it's becoming clear that 2nd layer solutions like Optimistic Rollups (ORUs) will take the forefront of developer attention. The roadmap for Uniswap V3 intends to solve the issues of scalability and overall capital efficiency and ORUs are rumored to be included in that release.

We'll have to wait and see what actually happens. Either way, I think that this is just a cooling off period for DeFi after the crazy rally we saw the past 2 months. In my opinion, we're still yet to see the major bull run that everyone's been waiting for.

 

 

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