2021 has been a wonderful year for investors. Cryptocurrencies are in the spotlight for the past few months, due to the considerable carbon footprint of Bitcoin (CCC:BTC-USD). However, Cardano (CCC:ADA-USD) is making more noise in the market. It is the fifth-biggest cryptocurrency in terms of market capitalization and is grabbing attention and investment from many. It is giving strong competition to Bitcoin and Ethereum (CCC:ETH-USD) today. There are a few interesting things about Cardano which makes it one to watch out for.
In 2020, ADA-USD was exchanging hands at around 18 cents but today it has reached $1.50. It has had a wild ride beginning this year and has managed to hold a strong position despite the recent crash. Besides being more affordable, it is also eco-friendly. There are 2 reasons to keep a watch for Cardano in the coming months. Let’s dig deeper into them.
As per the founder, Charles Hoskinson, the first-mover advantage of Ethereum is not a threat to the dominance of Cardano as a blockchain. It uses the proof of stake model which is very different from Bitcoin and Ethereum. This model reduces energy consumption since only a few people who own Cardano can mine ADA. It is an eco-friendly cryptocurrency that has set itself apart from the other cryptos. Cardano is already making heads turn with the Green blockchain technology. This technology alone makes for the bull case for ADA.
The biggest advantage Cardano has over Ethereum is that it offers an ideal alternative for decentralized finance applications. With a growing acceptance and popularity of DeFi, the adoption of Cardano will be higher. It offers high speed at a low fee.
Bitcoin looks expensive at the current rate and this is where Cardano offers a great bargain. It has the ability to reach new highs in the future. The only drawback was the lack of smart contracts and there is a solution now.
Cardano recently announced that Alonzo is running smart contracts and the update is set to launch on the Cardano blockchain by the end of July or early August. Alonzo can create simple smart contracts and pass them on to the ledger. It could be a confirmation of payment or a simple transaction.
With new markets opening up and tonnes of potential on the smart contract side, Cardano has a bright future. This is not it, Cardano is moving ahead with other developments as well and we will see some updates soon. The growing utility of Cardano makes it a cryptocurrency to watch out for.
Cardano: The Bottom Line
It is still early to take a position for all cryptocurrencies but for investors, it is important to separate hype from the investment they want to make. This crypto has been around for a while but it took a slow and steady approach. Cryptocurrencies are highly risky and they see extreme highs and lows. They are not for everyone but if you are ready to take the risk, Cardano has the potential to go higher in the coming months.
It is a strong platform and if it introduces smart contract capability well, it could become one of the top investment choices. It has the potential to double in value in the coming years. Cardano has a compelling story to watch out for. Many cryptocurrency experts may not agree with my opinion but I like to look at the potential of Cardano to transform the industry.
Cardano can become an ideal alternative to Ethereum in the future. If you are into cryptocurrencies, invest a small portion in Cardano, and remember it still has a long way to go.
On the date of publication, Vandita Jadeja 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.
Vandita Jadeja is a CPA and a freelance financial copywriter who loves to read and write about stocks. She believes in buying and holding for long term gains. Her knowledge of words and numbers helps her write clear stock analysis.