We have identified Cardano (ADA) as one of the cryptocurrencies to keep an eye out on this shortlist. Experts believe that by the end of 2021, ADA could cross $1 level (at the very least). Let’s check out the top 3 reasons why Cardano could end up ruling 2021.
Three Reasons Why Cardano ADA Could Double your Investment
1. External factors: Institutional investors knocking on crypto’s door
Cryptocurrencies as a whole are going to receive a significant boost as institutional investors continue to flood the marketplace.
According to a Fidelity investments survey, a third of large institutional investors own digital assets. Of the 774 investors surveyed across Europe and US, 36% said they own cryptocurrencies or derivatives. This increasing interest has prompted many companies like BitGo and Generis, to offer prime brokerages for institutional investors.
Many could also follow MicroStrategy's example and buy tremendous amounts of crypto as capital holdings. MicroStrategy already holds a little over 40,000 BTC and are actively looking to buy more.
2. External factors: DeFi developers looking for Ethereum alternatives
It’s no secret that Ethereum is the leading platform when it comes to DeFi applications. However, Ethereum, in its current form, doesn’t have the scalability or the features required to support a growing and thriving ecosystem. As such, developers are actively looking for an alternative platform to host their applications. We believe that Cardano has a huge opportunity here to tap into the DeFi market.
IOHK, the firm behind Cardano, said that DeFi applications could soon be coming to the blockchain. They have established a public fund called “Project Catalyst” that aims to boost DeFi development within the ecosystem.
The first Project Catalyst candidate to be announced is Liqwid. It is a DeFi lending market that allows participants to earn interest on deposits and borrow assets directly on the Cardano blockchain.
Liqwid architect Dewayne Cameron said:
Our team is competing in the Cardano Project Catalyst grant rounds to receive our seed-funding which will finance our core developers plus our dev partners Appinventiv and Tweag… we are excited to show the DeFi space what a no-VC, community-led DAO project on Cardano can deliver in comparison to the VC-backed Ethereum DeFi protocols we see today.
Apart from Liqwid, IOHK named “Maybe Workshop,” a project-based learning resource, another Project Catalyst candidate. The best projects will receive up to $250,000 worth of ADA to develop their projects. IOHK said that it will release millions of dollars worth of ADA next year as part of future funding rounds - “from content to community resources, Dapps to Defi.”
Valuation-wise, getting a slice of the DeFi pie can be immense for Cardano. Frank Holmes, CEO of U.S. Global Advisors, believes that Ethereum will benefit greatly from DeFi in 2021. We don’t see any reason why this won’t be true for Cardano as well.
As of writing, a little under $14.5 billion is locked up in DeFi contracts. DeFi development could have a long-term compounding effect on the ecosystem since better applications will attract more users, which will, in turn, attract more developers and encourage them to create better projects.
3. Internal factors: 2021 technical updates
Cardano is well-known in the cryptocurrency space for being backed by an extremely talented team who have prioritized research and careful planning over cashing in on the hype. According to Santiment, a behaviour analytics platform for cryptocurrencies, Cardano was the most actively developed project in 2019, beating out the likes of Ethereum and Storj.
As you can imagine, this heavy development has continued over 2020 and will continue as we move into 2021. The protocol will go through a hard fork soon as it moves to the third development phased called “Goguen.” In this phase, Cardano will actively work on smart contract integration and decentralization.
The upcoming hard fork introduces token-locking that enables its smart contracts to support certain conditions, such as making users hold tokens for a fixed period to complete a contract. After Goguen, the next upgrade will be “Voltaire,” which will introduce robust governance protocols into the system.
Overall, Cardano is one of the most thought out projects in the space built by technological savants who are carefully creating a protocol capable of disrupting the smart contract/DeFi space.
Since January, ADA has risen from $0.033 to $0.146 (as of writing). We fully expect this positive growth to continue into 2021. The integration of smart contracts and the in-flow of DeFi apps, along with more mainstream acceptance, will make Cardano one of the superstars of 2021.
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