Altcoin Cardano (CCC:ADA-USD) has become an investor favorite over the past few months. Since the start of the year, ADA has returned over 570% and is currently at $ 1.50.
Compared, Bitcoin (CCC:BTC-USD) and ether (CCC:ETH-USD) have returned more than 98% and 144% respectively.
Today there are thousands of altcoins to buy. With a market capitalization of around $ 39 billion, Cardano, a blockchain platform, is now one of the top ten cryptos.
Now investors are wondering whether the current craze could fuel ADA even further. In the coming weeks, the current Cardano hype could be replaced by profit-taking and increased choppiness.
However, the bull run in many altcoins like Cardano may only be just beginning. Here’s why.
The Cardano platform is growing
The Cardano platform was developed in 2015 before being completed and made available to the public in 2017. It was founded by Charles Hoskinson, co-founder of Ether.
ADA is the native token of the Cardano platform, which was inspired by academic research. Every transaction is recorded permanently and transparently in the platform’s blockchain. The Cardano Foundation acts as the custodian bank that promotes and standardizes the platform.
The latest research by Kursat Aydinli from the University of Zurich in Switzerland shows: “Cardano is a PoS (Proof-of-Stake) blockchain initiated by the IOHK Foundation, a technology company specializing in peer-to-peer applications and cryptocurrencies and was developed. ”
Bitcoin has a more expensive PoW (Proof of Work) system. There are two main layers: the Cardano Settlement Layer (CSL) and the Cardano Computational Layer (CCL). As a unit of account, CCL handles ADA transactions almost instantly with minimal transaction fees.
On the other hand, as the backbone of blockchain technology, CCL is the place where the advanced functions related to smart contracts or identity recognition are carried out. Blockchain analysts expect the Cardano platform to become a leading name in creating smart contracts and building decentralized applications.
ADA will be available from March on Coinbase, the cryptocurrency exchange platform expected to go public in 2021 Binance Platform. Now the supply of ADA is open to a much larger audience, which means more demand.
The latest news came from Charles Hoskinson, who said Cardano could soon support NFT (Non-Fungible Token) marketplaces. Such a development would definitely be an important catalyst for ADA’s price.
The 2020 altcoin leaders won’t necessarily be the top names of 2021. Cardano remains a tough contender to become one of the best altcoins for the rest of this year.
Due to its large market capitalization, it is currently a very popular currency among many in the crypto space. Many in the market now expect ADA to rise well above $ 2 in the coming months.
However, cryptos carry risks. Blockchain technology is still in its infancy. Since anonymity is readily available, scammers can easily hide behind a list of numbers.
Even with large corporations jumping on board the crypto room, there is little concrete evidence that ADA or other altcoins may become part of our daily lives in the near future. Integration into the mainstream is time-consuming and expensive.
Interested investors should keep an eye on Cardano to buy the dips. Those who are skeptical of altcoins may want to watch and research further for the time being.
As a new technology, blockchain, and as a new asset class, altcoins offer long-term investors much more options.
At the time of publication, Tezcan Gecgil had positions (neither directly nor indirectly) in the securities referred to in this article.
Tezcan Gecgil has been involved in investment management in the US and UK for over two decades. In addition to formal higher education in the field, she has also completed all three levels of the Chartered Market Technician (CMT) exam. Her passion is options trading, which is based on the technical analysis of fundamentally strong companies. She especially likes setting up covered calls to generate income on a weekly basis.