The cryptocurrency market has always been in a state of perpetual change, as more technologies are developed that further open up the possibilities of blockchain. But it seems that things have stepped up a gear in 2021, as DeFi has become the major talking point within the industry.
Since the beginning of the year, new projects have come to the fore offering investors the means to get more out of their cryptocurrency. Projects like Compound allow for the borrowing, lending and staking of various tokens, which means that participants can earn money on their crypto holdings, rather than have them simply sit around in a wallet.
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Inevitably, this has proven extremely popular and at the time of writing, there is an estimated $92 billion of cryptocurrency locked up in DeFi projects globally. There are several notable projects in the DeFi space, but what makes Compound interesting is its focus on the lending and borrowing of crypto and the way in which participants can simultaneously earn with its collateral token - known as cTokens.
In the following Compound (COMP) price predictions, we’ll take a closer look at how it compares to other popular DeFi projects and hear from other crypto analysts on what they are forecasting for Compound’s potential price movement in 2025 and 2030.
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- What is Compound?
- Looking at Compound’s Price History
- What’s next: Compound Price Predictions for 2025
- Looking Further Ahead: Compound Price Predictions for 2030
- Compound’s Main Rivals
- Conclusion: Should You Invest in Compound?
- Where to Buy Compound
What is Compound?
Compound is a system built on the Ethereum network that leverages smart contracts to provide crypto lending and borrowing. Participants on the network effectively lock their assets into the lending pools, which they can then accrue interest on. Those looking to borrow provide collateral crypto and pay a small interest fee on what they take in return.
The interest rates paid and received by borrowers and lenders is algorithmically calculated by the Compound network. What this means in real terms is that each crypto pool, or money market, will have its own interest rate, set according to supply and demand.
These money markets provide liquidity that can then facilitate similar services that you would expect to find in the traditional finance market, such as lending and borrowing, as well as the short-selling of cryptocurrency.
Then there are Compound’s cTokens. These are paid out to users to represent the funds they have locked into the network. For example, if you provide Ethereum tokens to the liquidity pool you will receive an equivalent amount of cTokens - in this case, cETH. You can close the position at any time and remove your Ethereum tokens from Compound, along with any interest you have accrued from lending your crypto.
What’s interesting here is that users who have provided liquidity to Compound can then put their cTokens to work by trading them or using them in the liquidity pools of other Dapps.
This is actually a key feature of DeFi projects - being able to effectively combine different protocols to maximise their effectiveness.
In addition to this, Compound uses another cryptocurrency native to incentivise users to its service. When a user interacts with a Compound market (by borrowing, withdrawing or repaying the asset), they are rewarded with COMP tokens. COMP can also be used on other protocols, as with cTokens, but also acts as Compound’s governance token.
Looking at Compound’s Price History
Whilst the Compound protocol itself has been on the scene since 2017, COMP only started trading in June of 2020. However, the network had already started to gain a following and its native token was in demand right from the outset, when it rocketed from $78.58 to $336.22 after just four days of trading.
Demand for COMP soon cooled though and it traded below $100 for much of the second half of 2020. By November, it was trading at around the $90 mark before going into an upward trend that would last for around 6 months. COMP was up to $157.72 before the end of 2020, but it was in January when things really started to take off.
COMP hit $250.67 in the first few weeks of 2021, but by 6 February prices had skyrocketed again to a then-record price of $535.29. Naturally, this led to a surge in interest in Compound, but no one expected what was to happen next.
Following some chaotic price movement in March and April, COMP went stratospheric in May, reaching its all-time high of $910.54 in the second week of the month - representing growth of some 470% for the year to date.
Since then, the crypto market has been hit by rumours of a regulatory crackdown in China and COMP has dropped significantly. Compound recovered in November to trade around the $380 mark and later dropped again by the end of the year, closing the last day of December 2021 at a price of $200.29. At the time of writing it was holding steady at around $119.
Compound Has Friends in High Places
It’s fairly obvious that Compound is a project with a great deal of potential and this inevitably attracted plenty of interest from investors looking to help get the project off the ground. In fact, Compound has received funding from some of the biggest venture capital vehicles in the industry.
Notably, Compound was the first-ever investment by Coinbase’s venture fund. The crypto exchange pumped $1m worth of USDC into Compound - a move which Compound CEO Robert Leshner said could be seen as “the starting point for the legitimization of open finance.”
In addition to being Coinbase’s first venture, Compound is also been financed by Bain Capital Ventures, Andreessen Horowitz and Polychain Capital, with additional funding from Transmedia Capital, Abstract Ventures, and Danhua Capital.
Of course, many DeFi projects have received significant investment, but given that some of the top venture capital firms operating in the crypto space have jumped on board with Compound, it certainly offers a vote of confidence in the technology and its potential for the future.
What’s Next: Compound (COMP) Price Predictions for 2025
It’s safe to say that big things are expected of Compound. DeFi has really started to take off over the last year and many investors are now looking to get involved with the top projects in the space. But what are industry analysts predictions for COMP’s future price movement?
Over the next four years, DigitalCoinPrice is predicting that COMP will grow significantly in value. By the end of 2022, the platform believes Compound (COMP) will be valued at around $156.21 and will continue to grow fairly steadily across the next two years, save for slight downturn in May 2024.
By 2025, Compound (COMP) is expected to have reached $298.45 in value, ending the year at roughly $275.61.
TradingBeasts' Compound price predictions look somewhat similar. According to its technical analysis, COMP will grow slowly for much of 2022 and 2023, reaching an average price of around $278.06 per token before continuing its growth throughout 2024. However, by 2025, it is expected that Compound (COMP) will be worth an average of $388.34 per token.
Another interesting Compound price prediction came from WalletInvestor. It has COMP reaching an average trading price of $16.64 before the end of 2022, before continuing to drop in value in the coming years. According to the platform, Compound (COMP) will reach a potential high of only $2.25 before the end of 2025.
Looking Further Ahead: Compound (COMP) Price Predictions for 2030
So most Compound price predictions for 2025 point to growth and suggest that now could be a good time to invest in COMP. But what about over the longer term? Naturally, any long-term price prediction for the crypto market should be taken with a pinch of salt, but it seems there is a lot of optimism surrounding Compound.
DigitalCoinPrice, for example, sees Compound (COMP) continuing to grow over the next few years. Having gone past the $295 mark as early as 2024, the platform predicts that Compound will have a reasonably difficult 2026, but by 2030 Compound will be closing in on the $500 mark, with an average trading price of over $496.29.
Meanwhile, Coin Price Forecast has made a little less enthusiastic Compound price prediction. The platform sees COMP growing by the end of 2025, reaching an impressive price of $285 by the end of the year. Compound will then see five years of sustained growth, before closing 2030 at a predicted price of $379.
Crypto-Rating has gone even further. They have predicted the Compound coin to potentially topping out at over $2,500 per coin in 2030.
A cryptocurrency research firm by the name of Crypto Research Report is calling for Compound (COMP) to reach $2100 by 2025, and $3500 by 2030.
Of course, all of these long term Compound price forecasts are very optimistic and should be seen as representing best-case scenarios. They should not be used as the basis for investment.
Compound (COMP) Price Predictions 2025-2030
The price of Compound (COMP) is expected to rise from $600 at the beginning of 2025 to $1,552 at the end of 2030.
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Compound’s Main Rivals
The DeFi space has really been hotting up in the last few months and Compound is just one of several projects vying for investors’ attention.
For example, most cryptocurrency investors are probably aware of Uniswap by this stage. It is amongst the largest decentralised exchanges in existence and offers crypto holders a place to exchange tokens as well as earn rewards by staking their crypto holdings in liquidity pools.
There are also a number of Uniswap offshoots, including SushiSwap and Pancake Swap, which offer similar services.
However, whilst Uniswap is a big name in the world of DeFi, it is not in direct competition with Compound, as the latter specialises in the lending and borrowing aspect, rather than a crypto to crypto exchange.
In reality, the only rivals that Compound has are Maker and AAVE. Maker is believed to have the highest total value within its system, with some $7.3B in assets locked and over $2.7B in outstanding loans, whilst AAVE has the most diverse offering when it comes to what tokens you can lend or borrow.
So how does Compound measure up? Well, despite Maker being the first DeFi lending platform to be launched, both Compound and AAVE now have larger communities 2020. Compound has the highest overall number of users and token holders - and ultimately users are what will make the platform viable.
It could be argued that AAVE has a technical edge over Compound, but the latter has a secret weapon: Compound Chain, a proprietary blockchain that will allow Compound to provide its services across multiple networks. Whereas most DeFi exchanges are currently limited to Ethereum, a Compound Chain will be able to swiftly interlink to any blockchain as well as other networks.
The prototype Compound Chain, Gateway, has been up and running since March and if it is able to deliver on the promises made by the Compound team, it could well see COMP given a major advantage over its competitors in the coming years.
Conclusion: Should You Invest in Compound?
DeFi is big news at the moment and Compound is undoubtedly one of the leading projects in the space. With its new blockchain being phased in and substantial backing from some of the industry’s biggest venture capital firms, Compound certainly has the credentials to be a market leader.
We’ve also seen that most crypto analysts are predicting growth for Compound COMP - with many tipping the coin to go past the $1,000 mark within the next ten years. Obviously, these predictions suggest that investing in Compound now could prove to be a good decision.
However, Compound isn’t without its rivals and we all know that nothing is guaranteed when it comes to cryptocurrency. As we have seen, there are other projects in the space and, whilst Compound is currently one of the leaders, no one can predict which developments will befall DeFi in the near future.
Ultimately, any investment is about managing risk and we believe that Compound is one of the most promising projects out there. If you are looking to add DeFi projects to your existing portfolio and are aware of the risks involved, then Compound could well be ideal for your next investment.
Where to Buy Compound Asset
If you want to invest in Compound then you’ll need to find an exchange that lists the coin. Fortunately, you have a few options. In fact, eToro - one of the leading providers of retail brokerage services - has just added COMP to its listings.
We recommend eToro for several reasons - not least because it has an accessible trading platform as well as plenty of information and learning resources to help you manage your investments.
Opening an account is quick and simple and assuming you have all the necessary information to hand, you can get access to the markets within minutes.
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What is Compound?
Compound is one of the leading DeFi projects of 2021, offering investors the chance to put their crypto to work by staking it in pools. It’s also possible to borrow other cryptos via the platform, with very reasonable rates of interest.
How much will Compound be worth in 2025?
Compounds governance token, COMP, is expected to see significant growth in the coming years. Analysts’ predictions vary but DigitalCoinPrice, for example, believes that Compound will be worth around $275.61 by 2025.
Is Compound the best DeFi project?
Not all DeFi projects offer the same services, so comparing them is often a little pointless. Compound’s main competitors are AAVE and Maker - both of which have their strong points. Ultimately, research is your friend. If you are looking to invest in DeFi, then be sure to read up on all the major projects before committing any funds.
Is Compound a good investment?
Despite widespread market optimism, cryptocurrency and blockchain technologies are still risky investments and should be approached as such. However, if you are an existing crypto investor looking to enter the DeFi space, Compound could well be amongst the top opportunities.
What are Compound price predictions for 2030?
Compound price predictions for 2030 should never be taken too seriously - especially given how fast the cryptocurrency market changes. However, to give you an idea of what long term Compound forecasts are like, Digital Coin Price has COMP closing in on $500 by 2030.