It only felt like just yesterday that I discussed Ankr (CCC:ANKR-USD), one of the most compelling blockchain node hosting solutions that has come up amid the digital jungle. And I’m not that far from the truth. I first discussed Ankr on May 12, which might as well have been a decade ago.
The terrible collapse that rocked the cryptocurrency sector like a category 5 hurricane hit with such force that I’ve temporarily lost my sense of time and space. As I write this, over the past seven days, Bitcoin (CCC:BTC-USD) shed around 20% in the digital market, while fast-charging Ethereum (CCC:ETH-USD) received a ruder awakening, tanking around 33%.
With these two titans of the crypto space absorbing such a beatdown, smaller assets like Ankr had no chance. Over the same one-week period, it shed around 18%. Suffice to say, as a recent stakeholder of the coin, I’m taking a sizable loss, which is a shame.
Ankr Has Real Potential That the Red Ink Doesn’t Reflect
No, I’m not feeling sorry for myself, because whenever you get involved with something like Ankr, you’ve got to understand the risks. In crazy crypto land, it’s a fine line between affluence and homelessness. Rather, I’m disappointed that the fundamentals didn’t save the coin — or at least mitigate its volatility.
Behind the silly techno-geek jargon, Ankr has true substance. Essentially, the blockchain project solves three problems:
- Capacity challenge of distributed cloud networks to support groundbreakingly ambitious initiatives
- The incentive dilemma for harnessing the nodes (computers) within a network or community
- Inherent inefficiencies of economies under centralized authorities
In a profoundly elegant manner, Ankr developed a distributed computing network where individuals can “lend” their computer’s storage or capacity to power the world’s most ambitious digital projects in return for crypto-based rewards. This way, both active project participants and those who happen to have latent computing capacity can come together to collaborate.
The inherent security of the Ankr platform fosters trust across borders. In this system, people want to cooperate with each other to build toward mutually beneficial goals because lack of cooperation (or outright conflict) sparks negative outcomes on both sides of the table.
Put another way, under the Ankr economy, you don’t need a centralized authority to dictate rules and protocols. Users cooperate with one another because of organic, symbiotic rewards.
Basically, Ankr is the blockchain equivalent of Uber (NYSE:UBER) or Lyft (NASDAQ:LYFT). While you occasionally have ride-sharing users act up, the vast majority don’t. Why? Because doing so will get you kicked out of the service network — and having access to this service is too valuable for users to just casually throw away. It’s the same principle with Ankr, which makes it so intriguing.
At the same time, the market has spoken.
All Eyes Are Always on Bitcoin
To be sure, no one knows for certain what will happen next with Bitcoin and the cryptocurrency market. This could be one of those hiccups that crypto traders are all too familiar with. A few days from now, we could be back on the $60,000 BTC bandwagon.
Then again, we could be looking at $6,000 BTC. Personally, I doubt that the crypto coin will drop that low. But anything is possible at this point. Unfortunately, as I’ve discussed regarding stock trading on margin, speculation reached a fever pitch. At some point, a de-leveraging was inevitable.
That said, the rise of Ethereum before the collapse suggested that the crypto market enjoyed significant maturity. Rather than just moving in tandem with Bitcoin, Ethereum soared on its own fundamentals, such as its development team moving toward an environmentally friendlier proof-of-stake protocol.
Further, you had crypto assets like Ankr, which printed technical chart patterns distinct from Bitcoin. And that made sense considering that this asset represents a next-generation economy rather than just a peer-to-peer payment platform.
Still, Ankr took a devastating hit in sympathy with Bitcoin, which makes the whole crypto sector suspect.
Wait for Your Buy-in Opportunity
If you want my opinion, I remain confident that Ankr has potential. However, if you haven’t purchased the underlying coin yet, I’d wait. While the virtual currency industry has indeed matured, it’s still too levered to Bitcoin.
And that being the case, Bitcoin has a lot further to fall. Though institutions are holding BTC, you must remember that many of these big players answer to their shareholders. I don’t think they’d be too happy having such a volatile asset on the balance sheet of their core investments.
To put it bluntly, look out for more pain, perhaps $25,000 BTC. If we fall down there, I don’t see how Ankr will stay elevated, given its inability to rise above the recent muck.
On the date of publication, Josh Enomoto held a LONG position in ANKR, BTC, ETH. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
A former senior business analyst for Sony Electronics, Josh Enomoto has helped broker major contracts with Fortune Global 500 companies. Over the past several years, he has delivered unique, critical insights for the investment markets, as well as various other industries including legal, construction management, and healthcare.