Investors should be highly excited following the successful Cardano (CCC:ADA-USD) Alonzo hard fork.
They have lots of reasons to remain optimistic about its future after the hard fork introduced smart contract capability to the network on Sept. 12.
While I believe that to certainly be the case, arguably more important news comes from Bank of America (NYSE:BAC). That news comes in the form of a 140-page report titled ‘Digital Assets Primer: Only the first inning’.
That’s where we should start in discussing bullish sentiment around Cardano.
The title alone clearly implies that digital assets are only going up from their current levels. That said, it’s incredibly difficult to establish a strong position on digital assets.
And at the same time, we’ve also seen Bitcoin fall from $64k to $30k between May and July only to rise back to $54k currently. That resurgence makes investors believe that digital assets aren’t going anywhere. But far fewer investors were bullish in the early summer.
So when traditional titans of the finance world like Bank of America issue long bullish reports on digital assets, investors become more bullish in aggregate.
Cardano and Bank of America
That’s exactly the takeaway inventors should get from the report. More specifically, Cardano investors should take an extra measure of certainty.
That’s because Bank of America named Cardano specifically in the report.
The report signals a sea change for Bank of America which had prior focused on Bitcoin and little else in cryptocurrency.
However, its new report suggests that the bank is looking into all aspects of the digital assets industry.
“Digital assets that enable a platform to be built, like the Apple iPhone did for applications, are gaining the most value; the top three: ether (365% ytd to $403bn value), cardano (1427% ytd to $89bn value) and binance coin (1142% ytd to $78bn value).”
That’s right, Bank of America indicated that Cardano is a specific cryptocurrency that it is watching. As noted, the bullishness is predicated on the fact that Cardano is a platform upon which multiple other digital assets can be built.
Cardano’s utility in building decentralized apps is precisely the reason it is mentioned alongside Ethereum.
Gaining on ETH
The other thing to note here is the rate of increase in value of those two assets. Cardano has long been noted as an Ethereum competitor. Many pundits believe that Cardano is quickly gaining on Ethereum and may someday overtake it.
It’s clear that Cardano’s growth is outpacing that of Ethereum, lending some credence to the idea that it will erode ETH’s position.
There are other metrics that also tell that same tale. I wrote about Ethereum’s dominance in the space a few weeks ago, but I also noted that its position in dapps is very clearly slipping:
“Ethereum controls 79% of the dapp space as measured by usage. That too, is shifting in a direction that favors Cardano,” I wrote. “In 2020 a mere 31% of new dapps were deployed on Ethereum. That’s quite a stark figure. And it makes it really difficult to suggest Ethereum is the future and competitors including Cardano are simply flashes in the pan.”
Cardano is continuing to establish a clearer and clearer case as a dominant force in dapp development.
It was clear before the Alonzo hard fork that Ethereum has fallen behind to some degree. The hard fork only made Cardano more attractive. More potential investors will research it as a consequence.
I am certain they will like what they see. And the recent Bank of America report will only reinforce the idea that Cardano has a truly important position in defi and cryptocurrency in the future as well.
On the date of publication, Alex Sirois 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.
Alex Sirois is a freelance contributor to InvestorPlace whose personal stock investing style is focused on long-term, buy-and-hold, wealth-building stock picks. Having worked in several industries from e-commerce to translation to education and utilizing his MBA from George Washington University, he brings a diverse set of skills through which he filters his writing.”