As demand for more DeFi products increases, a number of incredible projects are coming up. However, as is the case with any industry, only a few of these projects see the light of day. In the DeFi sector, Aave is among the protocols that have helped to significantly drive interest and attract new investors.
The decentralized lending system has been growing steadily since its debut in 2017. While several other lending platforms have been created, Aave was among the pioneers and has been able to withstand harsh competition due to its unique business model.
The platform has been growing both in terms of value, use cases and user base. According to CoinMarketCap, the protocol’s AAVE token now trades at $216 with a market cap of $2.7 billion. There is currently more than $10 billion worth of assets locked in the network, making it one of the most valuable DeFi projects.
But is it a good investment? Should you consider adding Aave to your portfolio? What are the most recent Aave price predictions?
If you are looking for answers to these questions, read on. We have prepared a comprehensive guide to highlight the current Aave price predictions and help you decided if you should start investing or look for an alternative.
What is Aave?
Aave is a decentralized crypto lending platform that enables its users to borrow and lend cryptocurrency assets without the need for a middleman like banks. People who lend their crypto earn interest on top of other incentives, making it a great option for passive income.
Aave runs on the Ethereum blockchain and uses a series of smart contracts to runs its operations. Smart contracts are pre-defined agreements that are automatically executed when certain conditions are made. This makes Aaave more efficient than traditional financial institutions that manually operate their lending services.
At its core, Aave is a smart combination of traditional lending/borrowing and blockchain technology. This means that the assets are algorithmically managed by a distributed network of computers. As a result, the users don’t have to worry about their funds being misappropriated by a central entity.
Aave users can borrow or lend up to 26 cryptocurrency assets. Some of the most popular options include ETH, WBTC, WETH, USDT, DAI, LINK and MANA.
To be able to borrow from Aave’s lending pool, you must first provide some collateral. This can be in the form of another cryptocurrency. For instance, if you want to borrow ETH, you can post your collateral in DAI. This way, you can gain access to several cryptocurrencies without actually owning them. If you use the native token AAVE as collateral, you are rewarded with a discount on your transaction fees.
What is more, the value of assets you borrow cannot be more than that of your collateral. When your request to borrow is successful, you will receive your funds in the form of another token known as an aToken. The aToken is pegged to the value of the token you borrow.
As a lender, you earn interest in the form of aTokens on your locked assets when people borrow them.
When you own the protocol’s native cryptocurrency AAVE, you are exposed to a number of benefits. For instance:
- You won’t be charged a fee if you are borrowing AAVE
- You get a discount on your fees if you use AAVE as collateral
- You get access to loans before they are publicly released if you pay the fee using AAVE
- You can borrow more if you post AAVE as collateral
All these are attempts to encourage people to use AAVE more and subsequently boost its value. But how is it doing so far in 2021?
Let’s find out below.
Aave in 2021 - Everything you Should Know
Aave has made plausible strides in 2021. Since the start of the year, the protocol has recorded substantial growth and is steadily positioning itself as a leader in the DeFi sector.
Aave saw the most dramatic price growth in 2021 compared to any other year. Although it started with a low price of less than $100, it was able to grow as high as $640 by May 2021.
Like any other cryptocurrency, AAVE has recorded wild levels of volatility. The price has been bouncing between bullish and bearish momentum for some time now and is currently trying to break out of a downtrend.
Apart from the price melodrama, several technical changes have also been implemented this year. For instance, new scalability frontiers were recently introduced. These include Polygon, which will help make it easier and cost-effective to interact with the protocol.
The protocol’s Polygon market saw increased adoption in April, with an additional 11,000 users and 7,000 borrowers hopping aboard. This drove the market to over $2 billion of liquidity with an estimated $1 billion of outstanding loans.
Consequently, over $13 million in revenue was generated for borrowers and lenders. That is just for the Polygon market. Aave has four markets in total. These are:
- AAVE V1 market: Over $410.6 million worth of assets locked
- AAVE V2 market: Over $11.9 billion worth of assets locked
- AMM market: Over $117 million worth of assets locked
- Polygon market: Over $4.9 billion worth of assets locked
Combined, the markets have almost $17 billion of liquidity with close to 50,000 users.
So, although the price seems to be struggling at the moment, we expect Aave to record even bigger numbers in the coming years. We will shortly be looking at what these numbers might be according to what experts are saying.
Before that, let’s look back at the Aave price history just to get a rough idea of where it might be headed.
AAVE Price History
Aave was released to the crypto market in 2017 and was then known as ETHLend but later rebranded to Aave. Although the protocol has only been in the market for a few years, it has made a lot of waves, making it one of the most targeted DeFi investments.
Like most new cryptocurrencies, AAVE started trading at a fairly low price. In fact, for the first two years, it was mostly under the radar and traded between $20 t0 $60 until October 2020. Towards the end of 2020, Aave was caught up in a market-wide bull run that continued until around May 2021.
The token began rising quickly in November 2020, and by December, it had reached $90. However, December was laden with high levels of fluctuation, and Aave struggled to cross the $100 mark.
But when 2021 came knocking with the bull run picking up momentum, the token quickly crossed the $100 resistance point, opening the door to a more linear price trajectory.
The growth was steady and unexpected. By the end of January, AAVE had crossed the $300 mark after gaining more than $200 since the start of the year.
After that, AAVE achieved new milestones with a series of all-time highs along the way. In February, it went above $550 but didn’t take long before the price started dropping again.
Between March and April, the token bounced between $300 and $500 before finally going over $500 at the start of May. On May 18th, AAVE reached its current all-time high of $643 in the midst of a highly volatile market. However, towards the end of the month, the price tumbled down to as low as $242, its lowest price since January.
This was partly caused by the announcement that the giant electric car manufacturer Tesla would no longer be accepting Bitcoin as payment. This announcement did not only gravely affect the price of BTC but also several other cryptocurrencies, including AAVE.
As a result, most investors pulled out, and the price of AAVE kept dropping. But not for long. On May 28th, it went back to $382 and then started on another gradual downtrend and is currently trading at $216, according to data from the price-tracking website CoinMarketCap.
AAVE Price Predictions in 2021
According to data from CoinMarkeCap, AAVE recently adopted a downtrend momentum and is struggling to break out of the $200 resistance point. At the time of writing, the token has been dropping for almost a week and shows a strong indication of dipping below $200 any time soon.
However, based on the expert analysis we have seen, the almost bearish trajectory might not be here to stay. There is a positive outlook for the protocol this year, and most of the predictions indicate that the token will bounce back soon.
One of the analysts predicting an impending slump below the $200 mark is Long Forecast. According to the site, AAVE might drop to $156 by the end of June and close July at $131. August will record the lowest price, with the token bottoming out at $113 before going back to the $131 mark in September.
It will then rise steadily to finish the year at $183, which is still lower than the current price.
Wallet Investor is more optimistic about the next few months. It predicts that AAVE will start July at $276 then cross $300 per token around the 19th of the month.
The token will reach and surpass the $400 level around mid-September and over $500 in early November. From here, the linear momentum continues until AAVE clocks $587 per token by the end of 2021.
As you can see, the two predictions from Wallet Investor and Long Forecast differ by more than $400, which is a pretty huge gap. Just when we thought that the predictions would become more unified with the year closing in, we still see wide gaps in the various predictions.
This is a clear indication that AAVE is still highly volatile, and you should be careful when investing in it.
The Italian based Previsioni Bitcoin seems to agree with Wallet Investor since its predicts that AAVE will end 2021 at $502 after a linear uptrend throughout the year. On the other hand, Digital Coin Price’s prediction of $295 by the end of the year, stands in the middle and tries to bridge the gap between the highest and lowest predictions.
AAVE Price Predictions in 2022-2023
Long Forecast is a tad bearish about how AAVE will fair in 2021. Fortunately, it speculates a positive trend from 2022 going forward. From what we have seen above, the site predicts that AAVE will end 2021 at a low price of $183.
However, in 2022, we see a gradual increase with the token starting the year at $212 and growing steadily to cross $400 by August and $488 by the end of the year.
While this is still lower than what Wallet Investor and Provisioni Bitcoin predicts for the end of 2021, it is a good sign since its projects an upward trajectory. In fact, Long Forecast predicts that AAVE might go about slightly above $500 in September 2022.
As expected, Wallet Investor is much far ahead in 2022. The price analyst continues with its 2021 momentum and starts 2022 at $589. We see a stable uptrend, with the coin hitting $600 within the first few days of January.
The uptrend will continue until around mid-August when AAVE crosses the coveted $1,000 mark and continues upwards until the end of the year where it trades at more than $122,000.
Although Provisioni Bitcoin fails to keep up with Wallet Investor in 2022, it is still pretty bullish. The site starts in 2022 at a high price of $487 per token.
It then predicts AAVE to grow through the months with alternating troughs and uptrends throughout the year. The highest price will come in May, where AAVE will cross $830. From there, it will start dropping and finish the year at $556.
For 2022, Digital Coin Price is behind Long Forecast. The price tracker predicts that AAVE will be trading at $355 by the end of the year. Although DCP shows an upward possibility, it predicts a drudgy growth which is why Long Forecast surpasses its predictions in 2022.
Things get even more exciting in 2023.
Long Forecast doesn’t seem to be sure about 2023 because they give the same figure for the whole year. For a volatile asset like Aave, that is unlikely to happen. The site indicates that AAVE will be trading at either $566 or $567 for the most part of the year, so we are going to assume they are yet to update.
Wallet Investor gives a more logical prediction by continuing with its previous bullish momentum. The price analyst predicts that 2023 will kick off at $1,219 and grow steadily to cross the $1,500 mark in mid-June. It will then reach $1,600 in early August and close the year at slightly above $1,800.
Digital Coin Price is still far behind, with its prediction of $426 by the end of 2023. This is close to Provisioni Bitcoin prediction of $457 by December 2023.
AAVE Price Predictions in 2024-2025
2024 and 2025 are too far to make an accurate prediction of how much AAVE will be. However, a few analysts have made their predictions, and we are going to quickly go through them below.
Let’s start with Wallet Investor, which predicts that AAVE will start 2024 at $1,861. This is a continuation of its 2023 uptrend. The price will be close for the most part of January, with February also playing at the $1,890 to $2,000 range.
In Mid-March, the price will cross the $2,000 mark and continue rising until the end of the year where it will be worth around $2,500.
The uptrend will keep up in 2024, where AAVE will start the year at $2,504. We see some fluctuations along the way, but there isn’t any notable volatility.
n Early March 2025, the price of AAVE will cross to $2,600 and maintain a bullish momentum that will drive it to over $3,000 in mid-October. After that, Wallet Investor doesn’t show any surprising price swings as it predicts Aave to be worth $3,128 by December 2025.
Long Forecast, on the other hand, predicts a drop throughout 2024 and 2025. The predictions are so low that they border bearish. According to AAVE, the protocol will start 2024 at slightly above $4,000 then quickly drop to end the year at around $220.
Although there is a rise to $280 at the start of 2025, the price will start falling again, and by mid-year, AAVE will be trading at around $170.
This is a really huge contrast to what Wallet Investor predicts for 2024 and 2025. For some reason, Long Forecast believes AAVE will adopt a bearish momentum in 2024 and 2025.
Even Digital Coin Price, with its slow growth projection, seems to be more hopeful. DCP predicts that AAVE will be worth $500, $632 and $746 by the end of 2024, 2025 and 2026 consecutively.
As we can see, the predictions become strikingly different each year. You can see that they are much more closer in 2021 than they are in 2024 or 2025.
Overall, these predictions are not final, and you should only take them with a pinch of salt.
Otherwise, if you are still wondering if AAVE is a good addition to your portfolio (given how confusing the predictions are), make sure to keep reading below.
Read More: AAVE Price Prediction for 2025 and 2030
The Future of Aave: What Experts are Saying
The DeFi industry is gaining mainstream adoption faster than most people expected. There is a lot of talk around the future of DeFi, with most people being confident that it will bring a notable disruption to the financial market.
A lot of experts are bullish on the future of Aave, with entrepreneurs like Mark Cuban warning that it might mean the end of banks and other financial institutions. According to Mark, financial institutions should be scared of the current DeFi wave.
Aave being at the forefront of the DeFi ecosystem, is likely to bask in its success and, in the process, make its investors rich.
Marc Zeller, the Integration Lead at Aave, says that they are working tirelessly to improve user experience and make Aave much more efficient to use. Mark also reports that the protocol intends to reduce transactions fees, especially for holders of the AAVE token.
Other future developments include the introduction of a new kind of insurance where users won’t have to depend on third-party insurers like Nexus Mutual. An in-house insurance system will likely be free to use and fully guarantee the safety of user money.
Forbes lists Aave as one of the largest borrowing protocols and a key player in the DeFi sector. This makes it a major target for investors looking to reap big from the anticipated success in the industry.
We can, therefore, expect Aave and its native token to go through a lot of changes in the coming years, both in terms of price and functionality. When the DeFi market finally gains mainstream adoption, Aave will be among the many protocols that will be highly in demand.
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Conclusion: Is Aave a Good Investment?
There are several things that make Aave an attractive investment. First off, the fact that the DeFi industry is still young means that Aave has a lot of room for development and will be among the first to be adopted.
For now, most people don’t understand the logic behind DeFi protocols like Aave. But with time, as use cases increase, the demand will rise, making Aave a goldmine for early investors.
Aave also seems to be a great long term investment considering how fast the price has grown in a short time. The protocol’s technical formation indicates that it has a strong buy potential, with the price expected to increase dramatically in the next five years.
Lastly, the entire cryptocurrency market is looking bright, which is good news for the DeFi sector. Since most DeFi projects depend on established cryptocurrencies, their success matter. For instance, a lending platform like Aave is directly dependent on the success of the cryptos locked in its liquidity pool.
If these cryptos are successful, people will likely borrow them more and potentially boost Aave use cases and value.
All in all, remember that investing in cryptocurrencies is risky, and you might lose all your investment. You should, therefore, do your own research and ensure that it is the right fit for your portfolio before investing.
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