The cryptocurrency market has built an incredible head of steam since last year. Though the market is booming, investors are skeptical about their long-term value. The fear of missing out (FOMO) has rushed people into bad trades and cryptos without genuine value. However, Cardano (CCC:ADA-USD) is a digital asset with plenty of use-cases and a long-term strategy, suggesting that ADA-USD will be around for years to come.
Cardano boasts a robust blockchain architecture that is significantly more adaptable, scalable, and energy-efficient than its peers. In addition to the transparency of its developers, the platform is data-driven and peer-reviewed. Hence, such a systematic approach will minimize its volatility.
After the much-awaited Alonzo hard fork, which brought smart contracts on its network, the ADA token has shed more than 20% of its value. It turned out to be a “buy the rumor, sell the news” event, but now investors can look forward to recovery.
Several Projects in the Pipeline
Cardano’s market capitalization has grown to over $66 billion, but many projects are in infancy. It has several projects under development, but many of them will take a few years at least to take off. Some of these include its digital art marketplace, a peer-to-peer crypto trading platform, an NFT marketplace, and a platform to trade stocks and real-world assets using the Cardano blockchain. Its NFT marketplace called CNFT.IO is live, and trading volume has already sped past six figures in daily trading volume.
The cynics believe that it may take several years for its services to justify the ADA token’s current price. As it stands, the network offers plenty of benefits to its users and has a real-world value, making it a strong long-term bet.
Moreover, it could solidify its position in the decentralized finance (DeFi) sector. For instance, in the execution of smart contracts, the transaction fee for Cardano is more than 95% lower than Ethereum (CCC:ETH-USD). Hence, Cardano could have multiple opportunities to expand its presence in the coming year. Additionally, it recently signed a partnership with another crypto platform in Chainlink (CCC:LINK-USD). The deal will enable Cardano to link its smart contracts with real-world data effectively. Some of the data that may be included are economic indicators, election results, price feeds, and other elements.
Cardano may appear to some crypto investors as a high-risk proposition at this time. It is relatively new and doesn’t have the same track record as many industry stalwarts such as Ethereum. However, it does have its strengths and several projects which could pay a lot of dividends down the road.
It recently completed its “Goguen” phase, which brought the all-important smart contracts to its network. Consequently, Cardano could not potentially become a major player in the DeFi realm along with Ethereum. Moreover, it will then focus on the “Basho” development phase, where it will substantially improve its network’s scalability through sidechains.
Cardano will finally undergo the “Voltaire” phase, which will focus on improving sustainability and adding unique features to foster decentralized decision-making. These mechanisms will enable users to vote on maintenance and development projects. Proposals will be discussed and voted on by its users, and funds will be released based on popularity.
Bottom Line on ADA-USD
Investors have talked down the long-term potential of cryptocurrencies, but ADA-USD seems to be an exception. Cardano has multiple use cases and a long-term growth plan, which indicates that it has sustainable value. Moreover, the release of smart contracts is likely to challenge Ethereum in the fast-growing DeFi space. Hence, ADA-USD’s bull case continues to improve over time.
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.