CARDANO (ADA) has had a good run this year, disregarding its struggles in the last few days. There has been lots of speculation amongst investors regarding whether the cryptocurrency could overtake Ethereum and Bitcoin. GCT explains what you need to know.
According to CoinGecko, ADA set a new ATH price above $3 on Monday, after soaring from $1.30 at the start of August. The cryptocurrency rose inside an ascending price channel. The market did find some resistance upon the upper boundary of the price channel after setting the ATH at almost $3.
Let's quickly take a run-through of what Cardano is.
The blockchain cryptocurrency was established by Charles Hoskinson, who was one of the eight co-founders of Bitcoin rival Ethereum. The big difference is, Cardano is known as the 'environmentally-friendly cryptocurrency- when compared to Bitcoin.
According to Hoskinson, Cardano uses just six gigawatt-hours of energy per year! On the other hand, Bitcoin and Ethereum use combined 180-terawatt hours annually.
It's interesting to note that one terawatt equals 1,000 gigawatts - meaning the energy used when compared with Cardano is substantially higher.
Cardano uses 'a proof of stake system', which restricts the number of devices when verifying transactions. This helps keep energy relatively low.
Let's discuss some risks of Cardano
When considering Cardano, keep in mind that ALL cryptocurrencies come with risks! The reason for this is that cryptocurrencies aren't regulated- in simple terms, this means that you don't have protection if something goes wrong.
It's possible to lose heaps of money very fast with the volatility in the crypto market. An example of this is the Cardano price dropping to a mere $1.06 in May, down from its high of $2.46 earlier in the month.
But can Cardano overtake Bitcoin and Ethereum?
While Cardano does come with some advantages, it’s still a lot less valuable than the other two cryptocurrencies.
In regards to market capitalization, Cardano is valued at under $90billion.
Bitcoin leads with a market capitalization of nearly $1 trillion and Ethereum are valued at around $372 billion.
But, here's where it gets interesting- Cardano's gains have experienced this year have far exceeded Bitcoin and Ethereum!
This year, to date Cardano is up more than 1,400%, Ethereum has risen 330%, and Bitcoin has climbed 67%.
Lark Davis, a crypto analyst, and YouTuber said this week that if Cardano quadruples its value, it would hit the same market cap as Ethereum!
On the other hand, another expert is skeptical about significant increases for Cardano happening in the long term. Elizabeth Hunker, an advisor at blockchain firm DecentraNET spoke to The Sun:
"Cardano is a ship on a rising blockchain and wider DLT tide. But its longevity and/or long-term 'moon potential' is another thing altogether, and entirely dependent if its Ghost Chain ecosystem, aka, notable lack of dApps, coming to life.”
According to CoinPriceForecast, Cardano is expected to hit $5 at the end of the year.
Currently, Cardano trades at $2.86.