This cryptocurrency registers a strong rise in its value in recent months and places tough competition on Bitcoin. The details
Cardano’s (ADA) cryptocurrency wallet addresses, worth at least $ 1 million equivalent, almost tripled in the latest crypto bull rally. On July 19, its value was $ 1.0225 per unit. However, its price began to rise and currently stands at around US $ 2,7501 per unit, a figure that marks a rise of more than 180%.
Meanwhile, in that same time frame, the total number of Cardano wallets containing at least $ 1 million in ADA tokens increased from 3,625 to 9,830.
What’s more, ADA rose more than 2,800% In the last 12 months, in this period the increase was from 504 to the current 9,830.
What is Cardano?
The development of Cardano is overseen by the Cardano Foundation, created by the mathematician and Ethereum co-creator Charles Hoskinson and it is an open source blockchain. In just a few months it went from being one of the 10 most used cryptocurrencies in the world to occupying the third place, achieving a total market value of $ 88 billion.
One of the conditions that makes bitcoin valued is its limited supply. In this case ADA also has a limit of 45 million tokens, of which 33 million have already been issued.. This scarcity forces the price to rise if investors want to keep buying the cryptocurrency.
The ADA surge in 2021 also led to an increase in the sum of your unspent transaction output (UTXO), which represent cryptocurrencies that remained in your wallets after being deposited.
Therefore, if a blockchain network sees an increase in UTXO, it indicates that most wallets have the cryptocurrency rather than transferring it to other addresses, that is, investors prefer to have it, to spend it.
This is similar to what happens with the dollar in Argentina, when many pesos are sold or many dollars are bought, it causes the price of the peso in relation to the US dollar to fall, and it seems that “the dollar is rising.” If investors decide to keep their cryptocurrencies, as Argentines keep dollars, then there will be little supply and there will be a lot of demand, causing the price to go up. This explains why ADA skyrocketed nearly 3,000% in the last year.
From 2.0 to 3.0
The decision to keep the ADA token, rather than sell it, may be due to the possibility that it will become the new Ethereum, its main competitor. Experts believe that this is possible, as Ethereum is considered as blockchain 2.0, while Cardano is seen as 3.0..
Additionally, the chances of a substitute for ETH increase as it experiences congestion issues on its network, and higher transaction fees..
“Cardano is a project that already has a good time, started in 2015 with its founder, who is a co-founder of Ethereum, and started ADA with a proof-of-stake (PoF) model, something that Ethereum is currently trying to do,” he commented. Norberto Giudice, known on Twitter as @CriptoNorber.
“One of the things that this network lacked, were smart contracts, that is why when they announced smart contracts last week, the token began to rise. Not only for that, but there are already projects that are being developed on the Cardano blockchain. And one of the most anticipated projects is Sundae swap, which is expected to be similar to what is pancake swap on the binance network. ”
“This third position, and it is still a long way from ETH in market capitalization, and still able to compete with it.. It is the main challenger, and if it enables smarts contracts or smart contracts, in addition to the defi world, it may surpass ETH “, he explained in a note published by Infobae.