Anchor Protocol (ANC) price prediction: What is Anchor Protocol?

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Terra's yield-generating protocol token (ANC) struggles after repeatedly losing its $1 peg

Anchor Protocol logo layered over a world map                                 
Anchor Protocol comes from the same founders as Terra – Photo: Shutterstock
                                

Contents

Anchor Protocol aims to put into practice one of the crucial aims behind cryptocurrency’s very existence. However, it was shaken when it played a key part in the depegging of the TerraUSD (UST) stablecoin and the ensuing collapse of the LUNA cryptocurrency.

The Anchor Protocol paid out a 19.5% reward for people who staked UST, but in early May 2022, the amount of UST deposited in Anchor fell as some significant investors withdrew their holdings. This had a knock-on effect, causing other investors to withdraw their UST in turn. This led to a run which depegged UST and caused the price of LUNA to collapse.

But what is Anchor Protocol (ANC)? How does Anchor Protocol work? And what is the Anchor Protocol price prediction? Let’s take a look.

Anchor Protocol explained

Ultimately, decentralised finance or DeFi is the idea that powers many blockchains and cryptocurrency. It’s based on the fact that there are more people with access to the internet than there are people with bank accounts. The idea is that DeFi allows people to make use of the services that traditional banks offer without having to be subject to a particular authority.

One thing offered by banks that could prove useful for the people DeFi wants to target is loans. The idea that decentralised finance and, in particular, cryptocurrency can be used for loans is something that can generate a lot of buzz. Cryptos like Compound are specialists in this area, but the question remains: Can there be a cryptocurrency that helps people provide loans rather than receive them?

This is where the Anchor Protocol comes in. Anchor exists on the Terra blockchain, and allows people to borrow certain amounts of the LUNA cryptocurrency, with borrowers using their own digital assets as collateral. People who put money into the Terra pool are rewarded with the Anchor Protocol (ANC) coin. People can also deposit ANC into the borrowing pool to earn interest, which is also paid in ANC.

In effect, people who hold Anchor Protocol crypto are in possession of a cryptocurrency savings account – another traditional offering from banks that DeFi enthusiasts want to get in on. The protocol paid out a significant amount of interest which, at least at one point, made it an intriguing proposition.

However, following its part in the depegging of the UST stablecoin, Anchor users voted to suspend both its earning and borrowing functions on 8 June 2022. 

The coin was founded by Daniel Shin and Do Kwon, the Korean crypto entrepreneurs behind both the Terra blockchain and the LUNA cryptocurrency. The protocol was first launched in early 2021 and the coin hit the open markets in March 2021.

Because ANC operates on the Terra Classic blockchain, it is a token, rather than a coin. You might see references to such things as an Anchor Protocol coin price prediction or ANC coin price prediction, but those references are, technically speaking, wrong. 

From the Anchor whitepaper

The Anchor: Anchored by the Global Economy whitepaper was published in October 2019 and is 38 pages long.

The document states: “Anchor is a two-token, algorithmic stablecoin pegged to the sustainable and predictable growth trend of the global economy. Anchor offers token users long-term price stability, protection against inflation, and preservation of purchasing power, while hedging against daily market volatility.”

The whitepaper goes on to say: “Providing an alternative to fiat-pegged stablecoins, Anchor aims to remain stable regardless of any fiat currency’s strength, market fluctuations or economic recessions.”

ANC price history

While the ANC price history is no indicator of future results, knowing how the token has behaved in the past can help us when it comes to both examining and making an Anchor Protocol price prediction. 

Anchor Protocol was launched on 17 March 2021, priced at $3.47. Plenty of potential investors wanted a slice of ANC and, on 19 March, it hit its all-time high of $8.31. The price soon settled down as the market calmed and at the end of the month it was trading below $5. ANC’s value remained largely stable throughout April 2021, hovering around $5, but the first half of May saw some encouraging signs of growth, with the token trading consistently above the $5 mark.

The great crypto day crash of 19 May 2021 then kickstarted a period of crypto decline and Anchor Protocol wasn’t immune to this, dropping below $3 in June before falling to a periodic low of $1.71 on 27 and 28 July.

August 2021 saw the cryptocurrency market rebound from its summer doldrums and Anchor Protocol was caught up in the recovery. By the end of the month it was trading at $3.09, and September saw more gradual progress as it reached a periodic high of $4.47 on 15 September. The coin then fell back, reaching a low of $2.72 on 29 September 2021 before closing the month at $3.06.

The coin traded relatively flat in October, but managed a small amount of growth to finish the month at $3.07. November saw another boom time for crypto and ANC performed reasonably, with a monthly high of $3.99 on 5 November 2021 and a close of $3.72, before the token boomed in early December, hitting a high of $4.43 on 4 December 2021. It spent much of the rest of the month in the high $3 region, with occasional forays above $4 before closing the year at $3.44.

The crypto found itself facing tough times in January 2022, however, and ANC fell to what was then an all-time low of $1.27 on 28 January before recovering slightly to close the month at $1.54, still down more than 55% on a monthly basis. Things then rebounded in February, and ANC closed the month at $3.48. 

In early March 2022, the coin peaked at $6.18, its highest recorded price in 10 months. However, on 10 May, the TerraUSD (UST) stablecoin broke from its $1 peg and its sister token, LUNA, fell by 50%. ANC was hit hard and by 10 May 2022 it was trading at $0.76, a new all-time low.

As the crisis continued, LUNA collapsed to a fraction of a cent and UST settled significantly below $0.20, the price of ANC also dropped, reaching a fresh all-time low of $0.05084 on 13 May 2022 as block production on the Terra blockchain was halted and UST and LUNA were both dropped, albeit temporarily, from Binance.

Once Terra block production resumed later on 13 May, the price of ANC started to recover somewhat and, by the morning of 16 May, it was worth about $0.166. Since then, though, the coin has drifted back down and, on 21 June 2022, ANC was worth about $0.124.

There was some more growth on the horizon, and on 29 June it reached an intraday high of $0.1954, but after that it was time to go back downhill. ANC hit a low of $0.1087 on 12 July, before rebounding to a high of $0.1384 the following day. After that, though, there was a dip to $0.1041 on 26 July. The token reached a high of $0.1377 on 1 August, but it has, albeit with some peaks and troughs, been downhill since then and, as of the morning of 15 August 2022, ANC was worth about $0.112. 

At that time, there were a little over 350 million ANC in circulation, out of a total supply of one billion. This gave it a market cap of around $39m, making it the 464th largest crypto by that metric. For comparison, on 10 May, Anchor Protocol had a market cap of just over $294m, making it the 139th largest cryptocurrency. 

Anchor Protocol price history
ANC price history – Credit: Currency.com

 

Anchor Protocol price forecast

Before looking at Anchor Protocol price predictions, we do need to remind you that price forecasts, especially when it comes to something as potentially volatile as cryptocurrencies, often turn out to be wrong.

TechNewsLeader’s Anchor Protocol price prediction for 2022 says the token will fall to $0.10 this year before hitting $0.16 next year. The site suggests that ANC can reach $0.23 in 2024, $0.34 in 2025 and $0.50 in 2026. In 2027, it thinks Anchor Protocol can reach $0.73 before hitting $1.08 in 2028 and $1.57 in 2029.

The site’s Anchor Protocol price prediction for 2030 is $2.26, while the site says ANC can reach $3.16 in 2031.

CoinsKid has an ANC price prediction that sees the coin close 2022 at $0.1688, before hitting $0.2370 in August 2023. For August 2024, 12 months later, CoinsKid suggests a value of around $0.1730. It thinks the average price in August 2025 will be $0.2329, while a year later ANC should trade at around $0.3912, before reaching $0.5152 by November 2026.

CaptainAltCoin says the token will drop to $0.0827 in November 2022 before recovering to $0.1335 in August 2023. The site makes an Anchor Protocol price prediction for 2025 that sees it trade at $0.2247 before it drops to $0.2042 in August 2027. After that, though, there will be a recovery, with it reaching $0.5618 in 2030 and $1.12 in 2040. 

WalletInvestor is rather more bearish in terms of its ANC token price prediction, and thinks that the crypto will fall to $0.01064 by August 2023. 

Final thoughts

While Anchor Protocol is, theoretically, an independent crypto, the fact that it’s linked to the Terra ecosystem and LUNA coin is currently a cause for concern for many investors, especially in the light of recent withdrawals and the depegging of UST and the collapse of LUNA. 

Secondly, with the crypto still being comparatively new, it’s not known how many people who use the Anchor Protocol for loans are legitimately unbanked people. There’s always the possibility that the system could be used for less than entirely clean purposes.

Thirdly, it’s always possible that another, more independent crypto system could come along and do what Anchor Protocol does but more efficiently, giving users better returns, and end up becoming more popular.

Fourthly, and perhaps most importantly right now, there are no current ways to earn or borrow using the system, until the vote of 8 June is overturned. As ever with crypto, it makes sense to be careful. 

FAQs

How many Anchor Protocol are there?

As of 15 August 2022, there were a little over 350 million ANC in circulation out of a total supply of one billion (35%).

Is Anchor Protocol a good investment?

It is hard to say. The depegging of UST and the collapse of LUNA did not help matters, and everything depends on whether ANC can rebound from the catastrophe, which might seem a hard task in light of the recent vote.

You will need to do your own research before investing.

Will Anchor Protocol go up?

It could do. The forecasts are pretty encouraging, but then again, forecasts often turn out to be wrong.

You will need to do your own research and remember that crypto prices can go down as well as up.

Should I invest in Anchor Protocol?

This is something that you will have to decide for yourself. Before you invest, be sure to do your own research, remember prices can go down as well as up, and never invest more money than you can afford to lose.

Further reading

The material provided on this website is for information purposes only and should not be regarded as investment research or investment advice. Any opinion that may be provided on this page is a subjective point of view of the author and does not constitute a recommendation by Currency Com Bel LLC or its partners. We do not make any endorsements or warranty on the accuracy or completeness of the information that is provided on this page. By relying on the information on this page, you acknowledge that you are acting knowingly and independently and that you accept all the risks involved.
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