Cardano price prediction: Reviewed by Digimagg

In the world of cryptocurrency, many investors focus their attention on established giants like Bitcoin and Ethereum. However, could Cardano be the sleeper hit that everyone overlooks?

Initially hailed as the potential "Ethereum killer," Cardano has since become one of the most polarizing projects in the crypto landscape. Its journey has been characterized by dramatic highs and lows, leaving a significant mark on the industry.

Despite its achievements, uncertainties linger around Cardano's future. Will it continue to rise to prominence, or will it fade into obscurity like numerous other projects?

To gain insight into Cardano's potential trajectory, we've sought the expertise of Gracy Chen, Managing Director of Bitget, to offer her perspective on the current state of Cardano and its prospects moving forward.

What is Cardano?

In the competitive realm of cryptocurrencies, Cardano emerges as a standout contender, offering a next-generation blockchain touted for its enhanced security, scalability, and sustainability. Founded in 2014, the project introduced its native token ADA in 2017, providing a platform for smart contract development and decentralized application creation while claiming superiority in security and efficiency compared to rivals.

According to Chen, Cardano exhibits vibrancy with "135 projects launched and 1,264 projects in various stages of development" on its chain. However, she acknowledges that not all projects have thrived, citing regulatory scrutiny and advancements in layer 2 blockchain technology as potential hindrances to Cardano's progress. 

Although Cardano was initially positioned to address the shortcomings of competitors like Ethereum, the advent of layer 2 blockchain solutions on Ethereum has significantly reduced transaction costs and boosted confirmation speed, diminishing Cardano's once-distinctive advantages.

Nevertheless, Chen underscores the foundation's commitment to development, education, and the introduction of new infrastructure such as stablecoins, programming languages, and wallets, along with the expansion of multi-chain solutions, outlining an ambitious future roadmap. Despite this forward-looking approach, the project's ability to fulfill its promises remains uncertain.

Cardano's price history

Cardano's price history resembles a roller coaster ride typical of many crypto projects, characterized by sharp highs followed by steep declines. In 2017, the Cardano blockchain and its native token, ADA, made their debut in the crypto market at $US0.0024, initially met with skepticism and dismissal as just another "high market-cap sh*tcoin".

However, ADA defied early judgments with the Alonzo hard fork in 2021, unlocking its smart contract capabilities amidst the crypto bull market. This pivotal moment propelled ADA's valuation to surge by 30 times, reaching an impressive market cap of $US94.9 billion, positioning ADA as a serious competitor in the crypto space.

During this surge, ADA even surpassed growth rates of major cryptocurrencies like BTC and ETH, demonstrating its distinct ascent. However, following the peak of the Alonzo hard fork in September 2021, ADA experienced a downward trajectory, leading to varied trends throughout 2023.

The crypto market saw renewed activity in the final quarter of 2023, driven by anticipation of the SEC's approval of pending spot Bitcoin ETF applications. While Cardano did not witness a comparable spike, it benefited from the overall market enthusiasm surrounding institutional acceptance of digital assets. As of March 21, 2024, ADA is trading at $US.64, nearly 180% higher than its value in October of the previous year.

What can we expect from Cardano in 2024?

Analyzing Cardano's on-chain data provides valuable insights into its current activity. With a total of 83.6 million transactions, averaging between 50,000 and 70,000 daily, Cardano's activity seems notable. However, when compared to Ethereum, a major player in the blockchain space, Cardano's numbers are dwarfed. Ethereum records daily transfers in the millions, highlighting the difference in scale.

Chen points out, "With Bitcoin reaching its all-time high, there are high hopes for other prominent blockchain projects in the crypto industry to surpass their historical highs. Currently, Cardano's price still lags behind its peak by 310%."

A key metric for project success is the number of developers working on the chain. The renewed interest in blockchain projects like Cardano has led to a surge in developer activity, reflected in the significant increase in new contracts deployed in March 2024.

"In just three weeks, the number of smart contracts on Cardano increased by 67%, adding 9,671 new contracts, showcasing the rapid growth and adoption of Cardano's smart contract platform," notes Chen.

Moreover, Cardano has emerged as the blockchain with the highest development activity in Q4 2023, surpassing major crypto projects like Polkadot, Kusama, Cosmos, and even Ethereum. This is evidenced by the significant number of GitHub commits recorded over the past 30 days.

Despite these positive developments, challenges remain. While over 100 projects are live and thousands more are in development, only a few have achieved success.

"The Total Value Locked (TVL) in Cardano's DeFi ecosystem surpassed $450 million in March 2024, marking a 300% increase from last year," explains Chen. However, compared to Ethereum's TVL of over $53 billion, it underscores the distance Cardano still needs to cover to compete effectively.

Regarding Cardano's price potential, Chen remains cautious. "In the short term, ADA's ability to deviate from BTC's prevailing trend appears limited," she says, noting a resistance point near $0.6. Nonetheless, there are reasons for optimism, as evidenced by the growth of projects like Indigo and Minswap, indicating healthy capital inflows and growing investor confidence in the ecosystem's potential.

What lies ahead for Cardano?

Before we explore potential scenarios, it's important to consider two key perspectives in the market. The bullish outlook is optimistic, envisioning scenarios where Cardano's price could surge. Conversely, the bearish outlook adopts a more cautious stance, highlighting reasons why Cardano's price might decline. These contrasting views provide a comprehensive understanding of potential market trajectories for the project.

The bullish case

Cardano boasts strengths and opportunities that cannot be overlooked. The Cardano Foundation's emphasis on development education, innovative infrastructure, and multi-chain solutions is commendable. According to Chen, certain aspects of Cardano's future inspire optimism. "Cardano's status as an established cryptocurrency project remains strong," she says. The support from various entities and communities gives ADA a unique potential for price growth. Moreover, the dedicated group of supporters contributes to the project's advancement, a crucial factor in gaining traction in the competitive crypto landscape.

The bearish case

Despite its promising outlook, Cardano faces challenges. Chen notes that "Cardano's ecosystem heavily relies on its native token, with moderate user engagement and trading volumes." Moreover, only a few projects within the Cardano ecosystem have achieved success, indicating the need for intensified operational efforts to foster substantial growth. The emergence of layer 2 blockchains has marginalized some layer 1 blockchains like Cardano, necessitating the project to carve out its niche in the market. Additionally, uncertainties surrounding ecosystem development, regulatory decisions, and broader macroeconomic conditions pose significant risks to ADA's future trajectory.

Is Cardano a sound investment option?

Assessing an asset's investment potential in the dynamic realm of cryptocurrencies requires careful consideration of available data and expert insights.

Chen provides a balanced view of ADA's future, acknowledging its strong foundation, infrastructure, and growing staking activity. However, she emphasizes the need for intensified operational efforts to drive further growth.

Regarding price projections, Chen suggests that ADA may fluctuate within the $US1 to $3 range, with potential for a sustained increase above $US1 with significant technological advancements.

While Cardano presents opportunities, challenges such as ecosystem development and regulatory uncertainties persist. Australian investors should conduct thorough research, seek financial advice, and approach Cardano as part of a diversified portfolio, mindful of the associated risks inherent in the crypto space.