The massive correction in Bitcoin (CCC:BTC-USD) led to a broad crypto crash, which wiped away $1 trillion from the market last week. Tesla’s (NASDAQ:TSLA) U-turn on accepting Bitcoin as a payment method and China’s crackdown on crypto use in the country was to blame for the correction. However, promising altcoins such as Cardano (CCC:ADA-USD) have held up well despite the shaky conditions in the market. As a result, Cardano’s bull case remains unblemished as it marches on to the $10 mark.
Cardano was developed as an energy-efficient alternative to Ethereum (CCC:ETH-USD) by its founder, Charles Hoskinson, in 2017. The proof of stake crypto is a flexible alternative to Ethereum, considering its rising gas fees. 32 billion ADA tokens are in circulation with a total supply of 45 billion.
Ethereum leads the smart contract realm, but its energy requirements are a major concern. The rising energy costs will discourage users from using the network, presenting Cardano as the best alternative. With that being said, let’s analyze things in detail to have a clearer understanding of Cardano’s solid positioning.
Cardano’s bull run has been nothing short of impressive, as it gained over 2,500% in the past 12 months. Other cryptocurrencies have also witnessed healthy growth in their values in the past year due to basically the same reasons. The devaluation of global currencies has driven the crypto market. Governments worldwide have increased the money supply at an incredible pace which has led to the devaluation of fiat currencies. As a result, Bitcoin became the go-to deflationary asset among institutional investors for the first time, and other altcoins soared alongside it.
For Cardano in particular, its listing on Coinbase’s platform gave it a major push at the market. The “Coinbase Effect” is massive as it provides access to a massive userbase of 56 million. This month, Elon Musk announced he was walking back on accepting Bitcoin for Tesla EVs due to energy concerns. Though it closes the door for Bitcoin and other major cryptos, it does open up an opportunity for “green coins” such as Cardano.
How Far Can Cardano Go?
Cardano has immense potential to become the top green coin in the market. It is built on a proof-of-stake algorithm which eliminates miner rewards to improve the efficiency of the network. In addition, it has several catalysts that could take its price past the $10 mark in the not-so-distant future.
NFT buyers are predominantly using Ethereum as a smart contract platform. If Cardano can get an edge in the smart contract realm, a substantial amount of cash could flow towards the ADA coin. Therefore, Cardano’s developers must ensure that there is no delay in launching the smart contract platform.
Elon Musk’s acceptance of the platform is another barrier; so far, he has ignored Cardano. However, if he goes after Cardano in the coming months or pushes another altcoin as its substitute, Cardano could lose a lot of value fast.
Bottom Line on Cardano
Cardano is one of the altcoins that has performed incredibly well since the beginning of the year. Cardano wallets rose a fantastic 40% in the first month of 2021. With multiple catalysts in place, it has the potential to blow past the $10 mark at the conclusion of this year. First, however, Cardano’s developers need to continue improving the platform and make headway on its objectives.
On the date of publication, Muslim Farooque 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
Muslim Farooque is a keen investor and an optimist at heart. A life-long gamer and tech enthusiast, he has a particular affinity for analyzing technology stocks. Muslim holds a bachelor’s of science degree in applied accounting from Oxford Brookes University.