In recent days, Cardano (CCC:ADA-USD) has fallen behind Solana (CCC:SOL-USD), though it has since regained some momentum and pulled ahead. As of Nov. 6, its market value was $62 billion vs. $72 billion for Solana, making it the No. 6 largest cryptocurrency by market capitalization.
Cardano is still around 33% down from its high of over $3. That high was achieved in early September.
By contrast, Solana is at $243. This is very near its all-time peak of nearly $260, which it achieved on Nov. 6. So you can see that the momentum seems to be with Solana.
Cardano Not Moving as Fast
Some think this is because Cardano is not seen as cutting edge a potential threat to Ethereum (CCC:ETH-USD) as Solana. Decrypt says that ADA has failed to maintain pace with its fellow “Ethereum killer.”
Solana has been “faster out of the gate” than Cardano. It has been setting up smart contracts, decentralized finance () applications, non-fungible token ( , to a less-congested network than Cardano.
Cardano is still gaining attention given its recent smart contract feature was launched in September. I wrote about this last month describing the hard fork called Alonzo that started the smart contract capabilities for Cardano that occurred on Sept. 12.
For example, there are no decentralized apps (dApps) using Cardano as a smart contract. An article published in Decrypt said that the lack of “killer apps” using Cardano smart contracts is a valid criticism.
The fact is, Cardano has yet to build up a comparable ecosystem of decentralized applications that Solana presently has. This probably is the best reason why ADA tokens are falling and SOL tokens are rising.
What To Do With ADA Crypto
Don’t write off Cardano just yet. Cardano is the largest cryptocurrency to use a proof of stake blockchain model. ADA was recently listed in Japan as a valid cryptocurrency.
However, Solana has been rising based on its ability to help create NFTs (non-fungible tokens), including the Solanart NFT marketplace. Solanart has been quickly grabbing market share in the NFT marketplace.
By contrast, Cardano is not nearly as prominent in the NFT space. This puts it severely behind the curve and undoubtedly has led to its lower market valuation compared to Solana.
Moreover, NFTs are not just for art collectors anymore. The rise of the Axie Infinity blockchain-based game which uses NFTs as game pieces has added to the utility of NFTs as gaming tokens. Axies are Pokémon-like digital creatures that players can buy and trade.
The point is Cardano doesn’t have anything like this, which hurts its popularity compared to Solana. And it’s not clear when Cardano’s NFT abilities or a robust marketplace will become popular.
That means that Cardano could keep falling. The reason is simple. People are selling their ADA tokens and buying SOL instead.
There is an old saying on Wall Street: Don’t fight the tape. That is taken from when prices were available only on a ticker tape. When the old-time traders saw their stock falling, they learned not to “fight” this trend. The same applies here.
Don’t fight the ADA tape. Stick with Solana instead of 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.