Cardano (CCC:ADA-USD) cryptocurrency has been floating down in the past two months. Even though ADA is ranked number 6 by CoinMarketCap with a $68.9 billion market value as of Nov. 3, it has actually been higher. As of yesterday, it was trading at $2.07 per token. This is well off where it was both one month and two months ago.
In fact, just one month ago I wrote that Cardano was ranked number 4 in terms of market capitalization. That was when it was trading at $2.27.
On top of that, it was priced around $2.89 two months ago. In other words, Cardano’s price has been drifting down. What’s up with this crypto?
Where Things Stand For Cardano
As I wrote last month, the cryptocurrency underwent a hard fork in September. The hard fork was developed by IOHK, the crypto’s promotion firm, and allowed smart contracts to begin launching as of Sept. 12.
This puts it in direct competition with developers who write smart contracts on the Ethereum (CCC:ETH-USD) platform. However, they started using smart contracts way back in 2015. There are a lot more developers using Ethereum for their smart contracts, decentralized apps (dApps) and non-fungible tokens (NFTs).
In other words, Cardano is still in a ramp-up period. Developers are just starting to turn to its platform to write new dApps, decentralized games and more.
Nevertheless, Charles Hoskinson, the founder of Cardano and CEO of IOHK, is predicting a huge spike in traffic on the platform. In fact, IOHK is now trying to prepare for this by beginning the development of “Layer 2.0,” or a second iterative Cardano platform.
Recent Positive Developments
According to Hoskinson, Cardano will help Dish provide 8 million digital identities to its customers. By putting identities on the Cardano blockchain platform, they become more private and secure. This is because the identities become immutable.
This is also a very good example of how blockchain platforms are going to revolutionize real-world software applications. It also tends to make the ADA more valuable over the long run.
Additionally, Dish will create a blockchain-based loyalty program for its customers, just like airline rewards programs.
In other news, IOHK announced a partnership with Chainlink Labs, a non-profit promoting organization for Chainlink (CCC:LINK-USD). The deal will encourage Chainlink developers to build smart contracts for Cardano DeFi applications. They will also be incentivized to provide real-time market data for developers building on the Cardano chain.
This will help spark the development of smart contracts on the Cardano network. Chainlink is an “oracle” platform, meaning it provides specific outside electronic data that is tailored for use in specific smart contracts. The smart contracts need this oracle data to execute their applications.
This works with decentralized finance (DeFi) applications and makes the deal well-suited for Cardano’s smart contract goal.
What to Do With Cardano
ADA is slowly building its utility in the real world. This involves creating a swell of demand for Cardano crypto through DeFi apps, smart contracts and its aforementioned partnerships.
As a result, expect ADA to slowly rise over the next year as traders and the market realize Cardano’s total value locked (TVL) is rising.
In other words, as demand rises and the supply of tokens remains limited, the price of ADA will have to rise. For the time being, there is no real way to estimate how high it could go. A lot will depend on how quickly demand for Cardano will grow.
But it stands to reason that over the next year, IOHK’s developments will bear fruit for the Cardano platform. As a result, expect its price to jump substantially higher.
On the date of publication, Mark R. Hake held a long position in 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.