• Federal reserve tightening and the prospect of increased regulation looms over the crypto market
• This could extend the “crypto winter,” keeping names like Cardano in hibernation in terms of price action
• However, if you’re bullish on crypto thriving over the long term, you may want to buy Cardano while it remains under $1.

The main issue now with Cardano (ADA-USD) is not with the coin itself. Rather, it’s with the current state of the cryptocurrency market.

Crypto prices may no longer be plummeting like they were in December and January. But with rising interest rates pushing down the value of risk-on assets and as the federal government starts getting serious about regulating this “wild west” financial market, a full rebound for Bitcoin (BTC-USD), Ethereum (ETH-USD) and other major coins could prove to be a challenge.

For ADA-USD specifically, the challenge could be even greater. As you may recall, Cardano didn’t peak in November, like we saw with Bitcoin and Ethereum. Its price peak occurred in September, after its blockchain implemented the Alonzo upgrades.

Since then, it’s dropped in price by more than 70%. Fewer in the market view this altcoin as a name that will give Ethereum a run for its money.

Nevertheless, if you’re confident crypto will survive today’s challenges and go on to become a wide-used alternative to fiat currency, then this is a name to buy. Once planned upgrades come online, Cardano could help materially improve usage of its network and sentiment for its native coin. In turn, enabling it to possibly return to its high-water mark.

What ‘Crypto Winter’ Means for Cardano

Market analysts may debate whether there’s a “crypto winter” going on. For instance, a recent research note from Bank of America has argued that while upside for crypto may be limited in the near term (due to rate hikes and macro headwinds), the space may not truly be in a winter.

Mainly, because user adoption is growing and further development of this space continues. This may all be true, but whether or not it’s a crypto winter in technical sense doesn’t matter so much to those looking to buy Cardano as an investment.

As it delivers middling returns, despite promises it was to be an inflation hedge, and as the above-mentioned factors threaten to limit upside, you may find it hard to be confident that the days of crypto moving upward will return once again.

Then again, you may not have such a pessimistic mindset about this asset class. Instead, you may be confident that current macro issues will pass. You may also be confident that regulation will be a positive, not a negative. If that’s your mindset, you may be gobbling up BTC and ETH hand over fist.

Yet while there’s nothing wrong with loading up on these names, on what could be short-lived weakness, you may want to consider loading up on Cardano as well.

This Altcoin Could Bounce Back

It may still seem like it’s best to skip on ADA. After all, despite all the positive news, like it seeing a big increase in total value locked (TVL), as well as growing developer activity, the market remains skeptical about this aspiring Ethereum killer.

The same thing’s played out with another would-be killer, Solana (SOL-USD). In SOL’s case, negative news like cyber attacks and network outages have outweighed positives like its high network speed. Confidence in either name grabbing the decentralized finance (DeFi) crown from ETH has plummeted.

However, it may be too early to say that Cardano is out of the running to do so. Why? The forthcoming Hydra upgrades. Once this scaling solution comes online, it will result in this coin’s blockchain having materially faster transaction speeds. That should in turn attract more developers, turning it into a more attractive platform for decentralized finance.

If this plays out, Cardano could see a big increase in its valuation. Right now, ADA has a market capitalization less than one-tenth that of ETH. That’s not to say a “flippening” between the two cryptos could happen. But the end result may be that this altcoin re-hits its past all-time high ($3.10 per coin) and hits new highs in the years ahead.

The Bottom Line

Cardano, which despite its drop remains one of the 10 most valuable, could continue to trade sideways in the near term. It could also experience another slight pullback.

Yet if you believe that the crypto winter will one day end, include Cardano on your buying list. With its Hydra catalyst, this coin could spring back to life once market conditions improve and said upgrades come online.

On the date of publication, Thomas Niel held long positions in Bitcoin and Ethereum. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.