Analysis Cardano price prediction: should you invest in this Ethereum challenger today? Share Article
The Cardano (ADA) price soared to a fresh all-time high at the end of February, having gained 720 per cent since the start of the year as the cryptocurrency market has rallied across the board.
ADA, the cryptocurrency that runs on the Cardano blockchain, in February overtook other coins such as US dollar stablecoin Tether (USDT) and Binance Coin (BNB) to become the third largest by market capitalisation, behind only Bitcoin (BTC) and Ethereum (ETH) .
What is Cardano and how does it differ from other cryptocurrencies? And is Cardano a good investment in 2021 for a diversified portfolio?
This Cardano price analysis looks at the cryptocurrency’s recent price performance, protocol developments and price predictions for the rest of 2021 and the coming years.Cardano offers an alternative to Ethereum
Only two days ago, on March 1, 2021, a “hard fork” update to the protocol turned Cardano into a multi-asset blockchain protocol, allowing users to create native custom tokens on the Cardano blockchain to run alongside the ADA cryptocurrency .The Daedalus wallet, which holds ADA coins, is now able to send and receive Cardano native tokens.
The Cardano blockchain platform was launched in 2017 as a competitor to the Ethereum blockchain.It was designed and built by decentralised company Input Output Hong Kong (IOHK).IOHK’s chief executive officer is Charles Hoskinson, co-founder of Ethereum.He founded IOHK in 2015 with Jeremy Wood, who also worked on Ethereum.
IOHK is an engineering and technology company that builds blockchains and cryptocurrencies for businesses, educational institutions and government entities.
In April 2019, IOHK launched Atala, an enterprise blockchain framework to be used by the Ethiopian government and other African nations.In September 2019, IOHK announced a partnership with athletic footwear company New Balance to use the Cardano blockchain to identify counterfeits of its footwear.
Ethereum and other competitors have made strong price gains with the advent of decentralised finance (DeFi) applications that run smart contracts on blockchains.
These contracts allow cryptocurrency holders to use their coins as collateral for financial services including loans, insurance, trading and savings.DeFi started to develop in 2020 and has the potential to change the financial services landscape.ADA crypto has rallied along with other cryptocurrencies even though it does not yet have DeFi applications running on the platform.
In July 2020 IOHK launched Project Atlas with the aim of enhancing users’ experience of the Cardano platform and the integration of its services, at the same time increasing the accessibility of its products and tools.
IOHK also launched its Project Catalyst initiative in mid-2020 to develop Cardano’s on-chain governance and accelerate community innovation.Six months in, the project has become the world’s largest decentralised autonomous organization (DAO), according to IOHK.On February 17, 2021, IOHK launched a $1m Fund 4, its largest fund to date, and said it had $250m available to support the development of the Cardano protocol.
In a blog post, the company noted: “We already have 7,000 members on the IdeaScale innovation platform with 1,800 active voters.Adoption is growing by 10 per cent every week and we have only just begun.”
In Fund 3, voter registration to allow users with more than 3,000 ADA to vote on changes to the platform was fully integrated with the Daedalus wallet.A mobile app is used to record votes, although a future Daedalus release will allow users to vote directly from the wallet.
At the end of 2020, IOHK announced plans to support the goal of opening up Cardano to multiple development languages over the long term.In late February, IOHK introduced a new development environment to support the Glow language.
The move will enable developers to write decentralised applications and deploy them on its Ethereum Virtual Machine (EVM) network, allowing Cardano and other blockchains to run smart contracts.
What do all these developments in updating and opening up the blockchain mean for Cardano predictions for 2021 and beyond? Before we dive into the forecasts, let’s first recap how the coin has performed over the years.The coin’s price reaches new highs
The first sale of ADA coins was held in September 2015, with another five rounds held up to January 2017.The ADA price climbed to a previous record high of $1.31 during the cryptocurrency rally in January 2018, but it then fell below $0.15 by April as the markets turned bearish.The price dropped further to end 2018 at $0.04 and was stable below $0.10 throughout 2019.
However, it broke out of the range over the summer of 2020, doubling to end the year at $0.19.
ADA briefly touched a new all-time high of $1.49 on February 27, 2021, maintaining upward momentum even as Bitcoin and altcoins pulled back from their highs during the month.It slipped back to the $1.20-1.30 level at the start of March.At the time of writing, March 3, the coin traded at $1.25.
ADA’s market capitalisation reached around $39bn at the start of March 2021, compared with around $175bn for Ethereum and $908 billion for Bitcoin .There are approximately 31.2 billion ADA coins in circulation, with supply capped at 45 billion.
So, will the ADA price go up in 2021? What do forecasts suggest about the direction of the price? Explore trading opportunities with trading calculator.