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Anchor Protocol price prediction: Can ANC survive?

12:49, 2 June 2022

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Anchor Protocol price prediction: Can ANC survive?
Anchor Protocol price prediction: Can ANC survive? Photo: karnoff / Shutterstock.com

Terra’s flagship decentralised finance (DeFi) platform Anchor Protocol saw its native token ANC crash in early May following the depegging of algorithmic stablecoin TerraUSD (UST).

There is uncertainty over the future of the Anchor Protocol after Terra forked into a new chain without its fallen stablecoin. Terra’s plan to leave out UST from its new chain has raised questions about the viability of the Anchor Protocol whose main offering was its near 20% interest returns on UST deposits.

ANC has been unable to arrest its decline as silence from Anchor Protocol’s team continues to unnerve investors. The token is about 97% off its all-time high, having fallen from $8.31 to $0.22, as of 2 June 2022.

If you are interested in ANC we have compiled all the important information you need to know about the Anchor Protocol and its native token. In this article, we will discuss the latest Anchor Protocol news and plausible ANC forecast for 2022 and beyond.

What is Anchor Protocol and its native token ANC?

Anchor is a savings protocol built on the Terra blockchain which aims to offer low-volatile yields on UST deposits. The platform was launched by Terraform Labs on March 17, 2021.

Anchor Token (ANC) is the protocol’s native and governance token. Tokens can be deposited to create new governance polls, which can be voted on by users staking ANC. ANC tokens are also issued to reward borrowers.

“ANC is designed to capture a portion of Anchor's yield, allowing its value to scale linearly with Anchor's assets under management (AUM),” Anchor’s website said.

How does Anchor Protocol work? According to its website, borrowers can borrow UST by using cryptocurrencies such as LUNA and ETH as collateral. Anchor Protocol is also designed to offer returns as high as 20% to lenders or depositors on their UST deposits.

Anchor Protocol’s market-beating UST deposit returns attracted yield-chasing investors as total value locked (TVL) on the protocol rose to over $17bn by early May 2022, data from DeFi Llama showed. 

Anchor Protocol quickly emerged as a top DeFi platform in the blockchain sector in terms of TVL alongside the likes of Ethereum-based protocols Aave and Curve in 2022.

As UST started depegging between 7 May and 8 May, Anchor Protocol saw its deposit drop about 20% in the span of two days. Capital flight from Terra’s ecosystem ensued while UST, LUNA and ANC prices crashed in the days that followed.

By the time the dust settled, TVL on Anchor Protocol had sunk from an all-time high of $17.15bn on 5 May to below $30m on 31 May.

Today (as of 2 June), Terra has hard forked into a new chain without UST. Anchor Protocol’s future remains uncertain. The savings protocol’s dependence on UST for its borrowing and lending operations makes the once-thriving platform at risk of being left out of Terra 2.0’s plans.

How dependent is Anchor Protocol on Terra’s algorithmic stablecoin, UST? Weeks before the crash, 72% of UST’s total circulating supply, then worth about $13.15bn, was locked in the Anchor Protocol alone. Moreover, Anchor Protocol’s high stablecoin yields were only open to UST deposits. 

What does Terra 2.0 mean for Anchor Protocol?

Following the collapse of algorithmic stablecoin UST, Terra was in a limbo as investor confidence in the ecosystem hit rock bottom. 

Terra’s native token LUNA, which once sat among the top ten most valuable cryptocurrencies, slumped from its record high of $119.18, hit less than two months ago, to trade at about $0.0001, as of 1 June. 

On 26 May, Terra’s community passed the Terra ecosystem revival proposal with 65.5% of participants voting to create a new blockchain without UST. 

According to the plan, the new chain will be called Terra, while the old chain will be known as Terra Classic. New LUNA2 tokens will be airdropped to Luna Classic stakers, Luna Classic holders and UST holders.

The plan also put out a list of “essential apps” whose developers would receive funding and support for building on Terra’s new chain. Anchor Protocol was not mentioned in the list of “essential apps that must exist in any web3 ecosystem to be viable”.

As of 1 June, there has been no communication from Anchor Protocol on its roadmap in the aftermath of Terra’s hard fork. 

Users on Anchor Protocol’s official forum complained about its website “not working” and being unable to withdraw their collateralised assets. Some voiced concerns about Anchor Protocol’s customer support.

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Many questioned if Anchor Protocol will exist on the new Terra Chain. “Will $ANC token and Anchor Protocol migrate to Luna 2.0?,” asked a user named Sabri. “Same question here, and I can’t find any answer,” wrote user s_ice in the same thread.

Anchor Protocol has not put out any update regarding its future on its website and on Twitter, as of 1 June.

Anchor Protocol token (ANC) price analysis

Anchor Protocol’s ANC token launched via an initial decentralised exchange offering (IDO) on 16 March 2021 at an opening price of $0.05. By 19 March 2021, ANC surged to an all-time high of $8.31, data from CoinMarketCap showed. Since then, ANC has been unable to scale new peaks and crashed to trade around $0.22, as of 2 June 2022.

According to the price chart, ANC saw strong gains in the first quarter (Q1) of 2022 as more investors deployed their capital in the Terra-based savings protocol. However, ANC was unable to build on this momentum as investor sentiment turned sour on the back of global monetary tightening pressures. 

ANC plunged to an all-time low of $0.0504 on 13 May 2022. The market has also seen bottom fishing and high-risk bets on ANC as the token has bounced back over 350% from all-time lows, as of 2 June.

However, at current prices of about $0.22, ANC remains about 97% away from its all-time high after losing about 93% year-to-date in 2022.

Will the ANC token survive the latest crash? Read on to learn the latest Anchor Protocol price prediction 2022 and beyond. 

Anchor Protocol (ANC) all-time performance

Anchor Protocol price prediction: Targets for 2022, 2025 and 2030

As of 2 June, CoinCodex’s short term ANC coin price prediction for 2022 saw the token dropping 6.55% to a target price of $0.20 by 7 June. CoinCodex added that technical indicators showed current (2 June) sentiment for ANC as ‘bearish’, while the fear and greed index indicated ‘extreme fear’ among ANC investors.

Wallet Investor’s ANC crypto price prediction expected ANC/USD to fall to an average price of $0.0176 by the end of 2022, $0.01073 by the end of 2023 and close ​​2025 at $0.00872. Its five-year ANC crypto price prediction suggested the token could trade at an average price of $0.00832 by May 2027.

Price Prediction’s ANC price prediction suggested that the coin could fall to an average price of $0.19 in 2022. However, its longer-term ANC prediction was bullish, as of 2 June. Anchor cryptocurrency was seen rebounding to $0.56 by 2025 and rising further to $3.46 by 2030, according to Price Prediction’s projections. 

DigitalCoinPrice’s Anchor Protocol crypto price prediction expected ANC to trade at an average price of $0.29 in 2022. Its long term Anchor Protocol coin price prediction suggested the token could hit a maximum price of $0.41 by 2025 and $1 by 2030.

When looking at Anchor Protocol predictions, you should remember that cryptocurrency markets are very volatile. Algorithm-based forecasts and analysts' expectations are based on past performance, which never guarantees future results. Predictions can be wrong. 

You should do your own research, build your own outlook for ANC and base your decision to trade according to your risk tolerance and trading goals. And never trade money you cannot afford to lose.

FAQs

Is Anchor Protocol a good investment?

As of 2 June, ANC has lost over 90% of its value year-to-date (2 June) on the back of Terra’s collapse in May 2022. It’s yet to be seen what the future holds for the token. You should do your own research and base your decision to trade ANC according to your risk tolerance. And never trade money you cannot afford to lose.

Is Anchor Protocol safe?

ANC prices crashed alongside UST and LUNA in May 2022 after the depegging of algorithmic stablecoin and capital flight from the Terra ecosystem. Anchor Protocol’s future remains uncertain after Terra hard forked into a new chain and abandoned UST in the process. As of 2 June, ANC has lost over 90% of its value year-to-date (2 June) in 2022.

Will Anchor Protocol price go up or down?

As of 2 June, the Anchor Protocol coin price prediction from DigitalCoinPrice suggested that the token could hit $1 by 2030. You should note that algorithm-based and analysts’ predictions can be wrong.

Why has the Anchor Protocol price been falling?

ANC has crashed over 90% year-to-date (as of 2 June) after the depegging of algorithmic stablecoin UST and capital flight from the Terra ecosystem.

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