DeFi is on the upswing in the crypto community. Several big players have emerged over recent years.
Compound (COMP) coin is a promising cryptocurrency that has taken the DeFi sector by storm.
According to CoinMarketCap, its price surged more than 500% this year, rising from $143.73 on 1 January 2021 to $911.20 on 12 May 2021. Prices have subsequently consolidated. It’s trading at $395.55, as of 4 June 2021.
This article discusses compound crypto price prediction, its fundamental analysis, technical analysis, analyst forecast, news, and other relevant issues.
What is Compound crypto?
Compound is a groundbreaking DeFi platform based on the ethereum (ETH) blockchain. It employs ERC-20 tokens, which allow users to earn interest on their cryptocurrencies by depositing them into one of the network's authorised pools without the need for a financial intermediary, like a bank.
Compound token (COMP) is a decentralised algorithmic money-market platform that facilitates loans in many cryptocurrencies by employing borrowing pools.
Borrowers can secure collateralised loans. Lenders, who make funds accessible to lending pools, can earn interest on their deposits through the use of specially-issued native Compound tokens.
How does Compound crypto work?
Compound links borrowers and lenders using a mixture of Ethereum-based smart contracts and cryptocurrency-based incentives.
Compound compensates lenders with COMP tokens, depending on the number of cTokens in their wallet, and a variable interest rate based on the available supply of that asset. The lower the interest rate, the more liquidity is in the market.
Users who lend their crypto assets to the Compound protocol are eligible for a loan in other cryptocurrencies, based on the quantity of collateral and the existence of that cryptocurrency in the Compound ecosystem. However, borrowers may be forced to liquidate their collateral if it falls below a particular maintenance level, and the interest rate charged varies depending on the borrowed asset.
Borrowers can receive a secured loan from any Compound pool by pledging collateral. The maximum loan-to-value (LTV) ratio fluctuates depending on the collateral asset - its current range is from 50% to 75%.
What makes Compound crypto unique?
According to Compound, most cryptocurrencies are dormant on exchange platforms, doing nothing for their owners. Compound wants to change this with its decentralised lending platform, which allows every crypto holder to earn interest on their cryptocurrencies, or take out a secured loan in an entirely transparent and secure manner.
Moreover, the community governance of Compound differentiates it from other comparable protocols. Holders of the platform's native governance COMP token can propose protocol modifications, debate, and agree on whether to integrate other suggestions, all without consulting the Compound team.
Compound crypto news and highlights
Following a significant period of price adjustment and retracement, DeFi exchanges and tokens are rebounding far quicker than a large number of digital assets that lost market value during the recent crash.
Compound became the first DeFi protocol to surpass $10bn in total value locked - an achievement celebrated by the crypto community on Twitter.
✨:star2::star:️✨:star2::star:️✨:star2::star:️@compoundfinance just became the first in #DeFi to break $10 BILLION Total Value Locked (TVL) https://t.co/JY7Du0uYh3— DeFi Pulse :grapes: (@defipulse) April 10, 2021
Andreessen Horowitz, a Compound investor, recently attempted to raise $1bn for the next generation of its cryptocurrency funds, nearly doubling the size of the previous version.
Compound coin price prediction and technical analysis
According to CoinMarketCap, the Compound cryptocurrency is hovering around $395.55 and has a market capitalisation of around $2.07bn, ranking it 49th in terms of market value, as of 4 June 2021, with a supply cap of 10 million.
Compound technical analysis shows that the current price is down more than 50% from its 30-day high and all-time high of $911.20. However, the price increased significantly from its 30-day low of $268.36.
According to investing.com, the monthly technical indicators and moving averages for the Compound cryptocurrency suggest sixteen buys and one sell recommendation. Weekly technical indicators and moving averages suggest six buy and sell signals.
The monthly support level for Compound is $180.62, and the monthly resistance level is $777.68, according to the fibonacci retracement levels.
Compound crypto has a "strong-buy" rating from analysts at investing.com.
Compound (COMP) coin price prediction 2021-2028
Wallet Investor, an algorithmic forecasting tool, is bullish on the Compound (COMP/USD) forecast. It expects that the minimum price of COMP will be $713.22 by the end of 2021.
The minimum price by the end of 2022 will be $1,374.25, $1,951.09 by the end of 2023, $2,421.65 by the end of 2024, $2,871.02 by the end of 2025, and $3,046.13 by May 2026, according to Wallet Investor's long-term Compound (COMP) coin price prediction.
According to their projections, COMP will rise by at least 550% over the next five years, or by more than 1000% in the best-case scenario, if the price of a COMP token hits $5,394.76 by May 2026.
Similarly, DigitalCoin forecasts COMP to be a long-term success. But its pricing forecasts are more conservative.
The price is anticipated to reach $581.64 at the end of 2021, $675.69 at the end of 2022, $831.04 at the end of 2023, $986.67 at the end of 2024, and $1,176.82 at the end of 2025. COMP is also expected to reach $1,754.13 by 2028, according to DigitalCoin.
Should you invest in Compound crypto?
Bearish market sentiments have drained billions of dollars from the cryptocurrency market in only a few weeks. Short-term market dynamics appear risky, given the enormous volatility and investor concerns.
Contracts for difference (CFDs) allow you to trade COMP/USD and other cryptocurrencies while speculating on their price volatility. CFDs enable you to go long or short based on market performance without owning the coins themselves.
For example, if you anticipate the price of COMP will rise, you can go long. If you anticipate it will fall, you can go short. You can profit from any price movement, whether up or down.
Trade COMP/USD - COMP/USD CFD
Frequently Asked Questions
According to CoinMarketCap, Compound recorded an all-time high of $911.2 on May 12th, 2021. Demand for DeFi is rising exponentially. Compound, as a prominent player in the DeFi industry, looks likely to flourish.
Over the last several months, the price of the compound currency has skyrocketed. Analysts from DigitalCoin and Wallet Investor believe COMP is a good long-term investment.
Due to extreme price volatility and prolonged bear market episodes, cryptocurrencies, in general, are considered a high-risk asset class. However, it is anticipated that demand for cryptocurrencies, particularly DeFi tokens, will increase. As a result, Compound, as a prominent player in the DeFi industry, is worth watching.
According to Wallet Investor, the price of a COMP token might reach $5,394.76 by May 2026, in the most optimistic scenario.