Traders and investors like Cardano (CCC:ADA-USD) for a number of reasons. For one thing, Cardano is quite affordable. It’s also prone to outsized price moves, which is appealing to traders seeking fast action.
Also, since it’s not the most well-known cryptocurrency, there’s the possibility of major price expansion if and when mainstream adoption takes place among businesses and individuals.
Cardano has other selling points as well, including its potential connection to a red-hot trend in digital collectibles.
It’s exciting to consider just how far this digital asset can fly and how much money can be made (assuming you time your trades correctly).
A Closer Look at the Cardano Price
Amazingly, Cardano was trading at around 4 cents a year ago. Back then, getting the price to $1 seemed like an ambitious goal.
However, the price climbed gradually throughout 2020. By the end of the year, the buyers had pushed it all the way up to 18 cents.
That’s already a sizable gain, but the biggest price moves were yet to come. There was a massive bull run in late January and early February, with the ADA price touching $1.32 on Feb. 27.
Finally, Cardano reached a 52-week high of around $1.47 on March 18. However, this was followed by a cooling-off period ADA trades today at around $1.19.
The $1 barrier was broken in 2021, but there’s more work for the bulls to do if they’re going to target $5, and a certain trend in the world of digital collectibles could help them reach that target.
NFT Mania in Effect
One advantage of Cardano is that its proof-of-stake technology means the Cardano network can validate transactions without a potentially more costly proof-of-work protocol.
Additionally, the coin is known for its speed, with the network possibly eventually being able to handle up to a million transactions per second.
Lately, though, some traders are eyeing Cardano for a possible connection to non-fungible tokens, or NFT’s.
NFT’s, are digital properties or collectibles which are stored on a digital ledger or blockchain, much like a cryptocurrency token might be stored on a blockchain.
The NFT market is basically a market that allows consumers to purchase digital art, videos, and a variety of other digital collectibles. The transactions are typically made in Ethereum (CCC:ETH-USD).
However, it’s been reported that there are Cardano developers who’ve managed to find ways to mint bootleg NFT’s.
Caution Is Advised
There was even a Reddit post in which a user claimed, “We just minted our first NFTs on the Cardano blockchain.”
Granted, if it’s possible to create NFT’s on the Cardano blockchain, this could quickly catalyze the ADA price. Just be advised, though, that Cardano doesn’t yet support smart contracts, nor does it have an NFT token standard.
Moreover, NFT’s are a trend, and the problem with trading trends is that they generally don’t last forever. Some folks might even claim that digital collectibles are already in a bubble that could burst at any moment.
Therefore, if the NFT connection does, in fact cause the Cardano price to shoot up to $5, it might be a wise strategy to take profits. After all, you’d probably already have multi-bagger gains by that point.
The Bottom Line
Could the ADA price get to $5 in 2021? It’s possible, but knowing when to take profits will be crucial to your fiscal health.
For now, the best policy could be to start accumulating Cardano in anticipation of a ramp-up in NFT trading activity. Just don’t go overboard, as trends can come and go quickly.
On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article.