Cardano (ADA) Is Mounting A Challenge To Become The Next Ethereum

Cardano (ADA) is one of the most interesting coins on the market today. The cryptocurrency, which was developed and launched by the Cardano Foundation, has been billed as the next generation Ethereum or the Ethereum killer of late and the implications of this billing have helped to push up the value of the coin dramatically over the last few months.

Towards the end of November, ADA went for $0.02 a piece. Right now, it’s up to $0.47, having dipped from weekend highs of around $0.55. Low to high, that’s a more than 2,600% appreciation.

Cardano Daily Chart

As ever, however, we’ve got to try and figure out whether there’s anything solid behind this run and – in turn – whether it’s worth picking up some coins at current prices in anticipation of further appreciation or whether it’s worth sitting on the sidelines of this one for the time being.

So, let’s do just that.

Bitcoin has some issues. As does Ethereum. These issues are rooted in things like scalability, security and efficiency. And as both get bigger and expand into an increased adoptive landscape, both are going to increasingly suffer from the issues associated with their limitations.

Cardano is an attempt to help the space overcome these issues. It’s headed up by Charles Hoskinson, who was one of the co-founders over at Ethereum, and he’s billing it as a third generation protocol (with bitcoin as the first generation and Ethereum as the second generation).

Basically, the company has taken the concepts that underpin Ethereum and subjected them to review by teams of scientists and engineers in an attempt to develop them into future-proof type concepts. Those that won’t have any problems scaling to millions or billions of users for example. Cardano (the platform) is the outcome of this review and ADA is the first cryptocurrency to be created using the so-called third-generation principles of the Cardano technology.

So why is this one running right now?

Well, it’s all about exposure. Over the weekend, ADA surged in price and – on the back of the surge – found itself in the top ten cryptocurrencies as listed on CoinMarketCap. Take a look at some of the other coins in this select group, however, and there’s one key difference between them and ADA – the latter is trading below $1 a piece.

From an objective valuation perspective, of course, this shouldn’t matter. Right now, however, we are seeing a lot of fresh entrants into the sector, all of which are looking to take advantage of the crypto space bull run. Psychologically, the fact that ADA is available for less than $1 means it becomes instantly attractive to potential investors. Why pick up one-tenth of a bitcoin when you can buy 10,000 ADA?

And can it continue?

While the driver behind the run as outlined above seems shaky, Cardano is in a fortunate position in that it genuinely could be a game changer in this sector. Cryptocurrency is looking for answers to scalability issues and Cardano has those answers. It’s also backed by a team that has proven successful in this space before and, importantly, has a very well established community of developers and followers – all of which are working to push the project from concept to the reality of being the third generation cryptocurrency that it’s billed as having the potential to be.

While we may see some degree of near-term corrective activity, therefore (we pretty much always see a correction after a run like that which we’ve just seen in ADA as the shorter term operators pull profits off the table), we think that such a dip could be a nice opportunity to pick up some cheap coins and – in turn – a discounted exposure to future growth.

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Disclaimer: This article should not be taken as, and is not intended to provide, investment advice. Please conduct your own thorough research before investing in any cryptocurrency.

Image courtesy of Cardano.