A dark horse cryptocurrency called Cardano is getting quite a bit of attention after a massive spike that preceded a significant correction this week.
Yashu Gola at NewsBTC reports that Cardano (ticker: ADA) reached a high of $1.49 before erasing half of those gains in a descending triangle that Gola describes as a “cascade of selling orders” that brought the value down about 21 percent.
To put that in perspective, as we were ringing in the new year, ADA was at all-time highs of $0.17.
With that in mind, some traders are considering the upsides to Cardano, for instance, the ability of holders to participate in non-fungible token or NFT markets. There’s also the assessment of the coin as greener then big crypto platforms like Bitcoin and Ethereum, with its proof of stake concept replacing the energy-intensive proof of work designs of the front running cryptocurrencies.
However, others point to shortcomings in Cardano’s potential for becoming a rival altcoin, including what one writer calls the “network effect.”
“A better ecosystem may not be enough (for ADA),” Vince Martin writes for InvestorPlace. “Simply put, that’s the way of the world. Betamax was reputedly better than VHS, and it cost Sony billions of dollars to make Blu-Ray triumph over HD-DVD. Few consumers believe McDonald’s makes the best hamburgers, even among fast-food chains. That issue is magnified for a cryptocurrency. … More users and more owners means more developers. That in turn means more projects, more use cases, and thus more users and more owners, and so on. Bitcoin’s move to a “store of value” concept perhaps makes it less of a direct competitor to Cardano. The two cryptos can co-exist. But Ethereum has a big lead, and Ethereum 2.0 will add some of the features that make Cardano attractive.”
Martin also cites “limited capabilities” that could create headwinds for Cardano’s development.
“Cardano ‘is still a work in progress.’” Martin writes, comparing Cardano’s track record to Ethereum’s well-developed ecosystem of smart contract functionalities. “Even its founder admits as such.”
Still, the upward potential of this “penny cryptocurrency” is tempting: for example, traders who feel that Bitcoin, at some $50,000 per coin, has too far to fall, ADA may be a safer wading in point to the cryptocurrency pool. Take a look.
