Ankr Is a High-Risk Crypto, But Web3 Growth Could Help It Grow

Investors in Ankr (ANKR-USD) have seen the value of crypto drop nearly 26% so far in the year. By comparison, Bitcoin (BTC-USD) and  Ethereum (ETH-USD) are down around 11% and 20% year-to-date (YTD).

ANKR: A visual representation of the cryptocurrency Ankr

Source: karnoff

ANKR, the primary utility token of the Ankr network, is currently changing hands around 7.7 cents. However, in April 2021, almost a year ago, it saw a record price of over 22 cents. Put another way, since then it has lost roughly two-thirds of its value. Now, early investors are wondering whether the digital coin can see reach that all-time high price in 2022.

Despite the decline in the price of the Ankr, the network has ambitious plans to become a leading Web3 infrastructure provider and software platform. Ankr offers decentralized cloud-computing services with real-world utility.

Therefore, with a market capitalization of around $626 million, the digital asset should see further growth in the years ahead. However, for now, Ankr price will likely stay volatile. Let’s see why.

Web3 Provides Tailwinds to Cryptos Like Ankr

Wall Street is excited about Web3, which will offer a network of commerce and individuals and rely on peer-to-peer (P2P) transactions. Web 2.0 depends on gatekeepers such as Meta Platforms (NASDAQ:FB) and other social media networks.

Web3, which will rely mainly on the blockchain technology, is expected to change that centralized structure and instead empower the individual. As James Beck put it writing for Consensys, “Web1 is read-only, Web2 is read-write, Web3 is read-write-own.”

Chainlink (LINK-USD), a prominent decentralized blockchain network, offers this explanation: “Powering the Web3 model is a growing stack of decentralized technologies, such as blockchains, smart contracts, oracles, crypto wallets, storage networks, and more.”

Cryptos such as Ankr will be at the center of Web3 as they power its economics and support business models. The current hype around the metaverse as well as non-fungible tokens (NFTs) are a taste of developments to come in the years ahead.

Ankr Has Utility

The Ankr platform utilizes idle computing power in data centers. As a result, cloud-computing companies can offer their underutilized resources to those that need cloud infrastructure. Thus, capacity providers can monetize their spare power, which can be used in blockchain-based operations, including decentralized applications (dApps), staking or hosting nodes.

Many analysts suggest that through P2P networks, blockchain technology could replace data centers in the future. Therefore, Ankr has the potential to disrupt traditional cloud providers, such as Amazon (NASDAQ:AMZN), Microsoft (NASDAQ:MSFT), and Alphabet (NASDAQ:GOOGL, NASDAQ:GOOG).

Here, I have to remind InvestorPlace readers that the Ankr network is the brainchild of Chandler Song, Ryan Fang and Stanley Wu, whose expertise on cloud-computing came from their professional life at Amazon Web Services (AWS). They believed the blockchain could power cloud networks, and launched Ankr.

Thus, the emerging Web3 ecosystem represents significant opportunities for Ankr. Cross-chain and multi-chain opportunities have become hugely popular with users. Previously complicated cross-chain activity is now much easier with a developing Web3 ecosystem.

The network recently launched Ankr V2, a decentralized web service portal for Web3 development. It allows builders to develop multi-chain systems, products and services. Ankr is specifically targeting emerging segments, notably decentralized gaming and metaverse apps.

Meanwhile, the platform is utilized by a wide range of projects, including Acala (ACA-USD), Binance (BNB-USD), Celo (CELO-USD) and Polygon (MATIC-USD). While many of the partnerships focus on expanding the reach of the platform, the network has also also signed marketing deals. For example, since October 2021, it has had a collaboration with the Sacramento Kings.

The Bottom Line

Decentralized apps that will empower Web3 are gaining traction. For instance, as gaming apps and the metaverse see further adoption, Ankr’s ecosystem could see further use, driving the value of Ankr higher.

However, like most cryptos, it remains a high-risk token. Given the choppiness in broader markets, Ankr is also likely to remain volatile in the foreseeable future. Therefore, a diversification strategy may be the best approach for investors looking to profit from Ankr’s growth potential.

On the date of publication, Tezcan Gecgil did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Tezcan Gecgil has worked in investment management for over two decades in the U.S. and U.K. In addition to formal higher education in the field, she has also completed all 3 levels of the Chartered Market Technician (CMT) examination. Her passion is for options trading based on technical analysis of fundamentally strong companies. She especially enjoys setting up weekly covered calls for income generation.


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