Like with almost everything else in life, extremes on Wall Street are rarely sustainable. Eventually both sides tend to meet somewhere in the middle. This is the case with the debate around cryptocurrency. Specifically, today, we will focus on the opportunity in Cardano (CCC:ADA-USD).
First let’s establish that I am not your typical cheerleader of “to da moon” Shiba (CCC:SHIBA-USD) coin. However, I strongly believe that crypto will play an important global financial role.
I am confident that we will have to deal with cryptocurrencies forever. In fact, the use of crypto will increase and eventually overtake cash. Traditional money is on its way out, albeit at a very slow pace. This is not going to happen quickly because the central banks will fight it tooth and nail.
Everything else is going digital, so will all financial transactions. The crypto craze is a misnomer because this is a trend not a fad. So far I have not mentioned the ADA-USD coin specifically. It is important to first establish the need for the concept, then the specific opportunity within it.
I have so far invested only in crypto coins that offer legitimate use cases. The king of that is currently Ethereum . Cardano is vying to carve its niche there too. The Cardano blockchain serves a viable purpose like Ethereum (CCC:ETH-USD). While the ADA-USD is the crypto coin that feeds it. Investors can own the coin which appreciates over time like other assets would.
Cardano Profits Are Real
Why should you bother? If you did this about a year ago, you would have had a 1,600% return on your investment. In fact, if you read my article in August, you’d have had at 60% rally quickly.
That is real — not fake — money that you could convert to FIAT currency any time. This is not counting the optional extra 2% annual reward that they offer through staking. What is that? Staking is similar to dividends from old school CDs. If I lock my ADA coins for three months, I can then participate in a 2% reward.
I suggest that investors shed their perceptions and dig deeper into the crypto opportunities. It’s not going away, so you might as well start early. Yes, this is still an infant concept and they are making the rules we progress.
One thing is for sure, crypto is pushing the envelop of financial technology. This means that companies like Square (NYSE:SQ), Paypal (NASDAQ:PYPL) and even the legacy processors like Visa (NYSE:V) and MasterCard (NYSE:MA) are jumping in.
I think if we stop calling them currencies people will take them more seriously. They are not that yet, nor do they need to be to deliver profits. They currently are awesome investment assets. The king of crypto is Bitcoin (CCC:BTC-USD) and it has no competition with how well it performed in the last 10 years.
Bar none it has been the best investment anyone could have done in hindsight. Catching up fast is Ethereum on the back of the ubiquity of its platform. Currently it is the backbone of choice, but Cardano is also in the mix.
Therefore, ADA-USD makes for a good investment in the long term. Nevertheless, it wouldn’t be my sole choice, in fact it wouldn’t even be my first choice. Even though it presents a viable bullish argument, I prefer Solana (CCC:SOL-USD) ahead of it.
Accumulating It Over Time Makes Sense
Now that we established that ADA-USD is a crypto worth owning, it comes down to finding opportunistic entry points. In general, investing in e-coins makes most sense the way we did gold years ago. The idea is to accumulate coins in small bits and over time. This eliminates the need to be surgical trying to time a perfect one entry point.
I actually like a blend of both methods, because I can’t help but trade around the price action. Currently there is support for ADA-USD into $1.8 and $1.4. either of those would make for decent buy points.
On the date of publication, Nicolas Chahine 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.
Nicolas Chahine is the managing director of SellSpreads.com.