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Expect More Pain Ahead in Constantly Tumbling Cardano

Cardano (CCC:ADA-USD) keeps falling — more than other cryptocurrencies. ADA crypto is now down over 29 cents in the past month, as of Nov. 21, when it was at $1.87 per token. That is a drop of 13.5%.

Cardano (ADA) token with blue and orange digital background.

Source: Stanslavs / Shutterstock

Moreover, in the last 3 months, it peaked at $2.9634 on Sept. 1. This represents a tumble of over $1.09 per ADA crypto token or a loss of 36.9%.

This is a much worse performance than other cryptos its size or larger. For example, Solana (CCC:SOL-USD), which is slightly larger, has risen 19.1% in the past month, not dropped like Cardano. Solana now has a market capitalization of $71 billion, but Cardano is at just $62.2 billion.

Moreover, by comparison, Solana is up 222% in the past three months, not down 37% like at Cardano. Ethereum (CCC:ETH-USD) is up over 10% in the last month, and in the last 3 months, it’s up over 35%. This puts Cardano’s 37% drop in the same period to shame.

In fact, Binance Coin (CCC:BNB-USD), which has a $99 billion market cap, is up in both its one-month and 3-month performance. It’s up over 25.3% in the last month and up 30.6% in the last 3 months.

The same is true for Bitcoin (CCC:BTC-USD). Although being down 5.3% in the last month, it’s still up 21.1% in the last 3 months, not down like Cardano.

This Should Tell You Something

So Cardano is the odd man out. It should imply something significant. I have written about the issues with Cardano in several other articles.

One of my concerns is that Cardano’s smart contract upgrade has not taken off that well. So far the Alonzo hard fork, or upgrade, has not yet shown to have brought in a good number of new apps.

For example, developers have not yet taken up the Cardano script en masse, so to speak, to write smart contract apps in the Defi arena (decentralized finance). Nor is there a major NFT (non-fungible token) marketplace that has taken up a large market share with trading in NFTs.

It’s not that I don’t think this will come sometime in the future. At least right now, Cardano’s smart contract upgrade capabilities have yet to catch on with new games, DeFi apps, NFTs, etc.

And as I have shown the crypto simply does not have a large market share in terms of Total Value Locked (TVL). To put it bluntly, Cardano simply has no TVL market share, according to DefiLlama.com, which doesn’t even rank Cardano-based apps.

What this tells me, along with the drop in ADA crypto price, is that Cardano is on its backfoot. It needs to book a major win, a major app or sponsor, company or personality backing its ongoing development.

What to Do With ADA Crypto

At this point, despite being near a trough, it might make sense for value crypto buyers to wait out the weakness in the price. It’s always possible this extra volatility — compared to other cryptos its size — is indicative of another leg down.

The torrent of bearish sentiment sometimes feeds on itself. For example, it’s hard to get people to believe in a turnaround without any major news. In fact, when the Alonzo hard fork came out in September, Decrypt magazine quoted a number of critics on Cardano. Some of them “cast doubt on whether Cardano’s smart contract models are up to the task.” The article mentioned that Cardano’s script needs a number of “workarounds.”

I suspect that most investors will hold off putting new money into ADA crypto until Cardano smart contracts start to win big support. That seems like a winning formula in the cryptocurrency arena, which has many cryptos spending large amounts on marketing and technology. So far I don’t see that happening with Cardano.

On the date of publication, Mark R. Hake did not hold any position, directly or indirectly, in any security mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Mark Hake writes about personal finance on mrhake.medium.com and runs the Total Yield Value Guide which you can review here.


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