Cardano (CCC:ADA-USD) could move higher as one of the big four cryptocurrencies alongside Bitcoin (CCC:BTC-USD), Ethereum (CCC:ETH-USD), and Binance Coin (BNB-USD). In fact, Cardano has at times moved to the third place spot depending on the daily moves in Binance Coin and its own price. As it stands today Cardano has a market value of over $73 billion and is just shy of a billion dollars away from reclaiming the third place spot.
In fact, after tumbling to a trough on July 20 of just under $1.03, it is up over 100% in a few months to $2.27. The main reason seems to be the change that the cryptocurrency took in August.
This development is likely to keep pushing Cardano even higher.
The Alonzo Hard Fork
“…the Alonzo hard fork will bringfunctionality to the network, meaning that developers will be able to build decentralized finance ( ) apps that enable the lending, borrowing, and trading of assets without resorting to centralized intermediaries such as banks.”
That is why Cardano is up so much. The hard fork developed by IOHK, the crypto’s promotion firm, allowed smart contracts to begin launching as of Sept. 12. This puts it in direct competition with Ethereum, which started using smart contracts way back in 2015. So Cardano has a huge hill to climb here.
One of the issues now is that there are no decentralized apps (dApps) that stand ready to use Cardano as a smart contract. An article published in Decrypt said that the lack of “killer apps” to introduce Cardano smart contracts multi-transaction processing is a viable criticism.
So it may take some time before this crypto gets its act in gear. IOHK hopes that the new smart contract ability will entice developers to use Cardano as a platform for new dApps and even NFTs (non-fungible tokens).
Cointelegraph magazine points out that this could be a long process. It quotes an analyst who says it will be “more than two years for DApps to be deployed and operate at full scale on Cardano, as it was with the Ethereum network.”
Nevertheless, the article points out that Cardano is one of the most developed cryptos. It has the highest average monthly commits per month on code repository GitHub.
These “commits” essentially represent any additions or amendments made to the network’s source code on GitHub. Cardano essentially ranks ahead of Ethereum in these commits. This shows that there are large numbers of developers familiar with Cardano who may not want to use it for dApps and NFTs.
Where This Leaves Cardano
Cardano began development in 2015 helmed by Charles Hoskinson in order to outperform Ethereum. Six years later it is finally able to offer smart contracts and dApps on its platform. It’s been a long road.
If the crypto can eventually live up to the ability to directly compete with Ethereum, then its market cap of $73 billion might actually be deserved. But, of course, that is using rationality.
The way the market works is that it will project out first and then adjust. That works on the upside just as well as the downside. Right now the narrative is that Cardano might actually be able to get there, so let’s keep its market value high.
And if it does start capturing market share in the dApps, DeFi and NFT arenas, Cardano will likely leap forward to an even higher market cap. In other words, the market will jump forward ahead another three or four years.
But, of course, the opposite could happen as well, so let the buyer beware.
On the date of publication, Mark R. Hake held a long position in Bitcoin and Ethereum but not in any other security mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.