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What Will Drive The Cardano Price In 2021?

An analytical guide to investing in Cardano ADA

13 Min Read
Last Updated March 27th 2021

Where will Cardano price go in 2021? Crypto investors have always wondered: What drives the Cardano price?

Cardano is a third-generation decentralized app (Dapp) development and a public blockchain platform. Investors had been eyeing Cardano because of its unique feature of integrated reviewed research. It is currently ranked at number 8 in the cryptocurrency market and has sustained its rank for quite some time now.

There’s a good amount of interest in Cardano which has led to many investors asking the question: What drives its prices? 

The three factors that affect the prices of Cardano are:

  • Adoption 
  • Competing coins 
  • Market forces

 

We will explain more in-depth how these factors affect the price of ADA but first why you should be on the lookout for Cardano? 

Why Cardano (ADA)? 

The third generation of the cryptocurrencies was able to learn lessons from the first two. Cardano was able to integrate the hallmark features of the first generation, Bitcoin, and the second generation Ethereum. Additionally, it introduced innovation to the market with its integrated research feature.

Cardano also made use of newer technology and developments to refine the features of the first and second-generation coins. 

cardano price  movementschart

Cardano all-time price movements. Source: Investing.com

With Cardano's layered architecture, it has successfully enhanced scalability, durability and safety of cryptocurrencies. Cardano had been able to bridge the gaps that its predecessors had created. 

The vision of the developers of Cardano was to reinstate people's faith in the global economic framework by giving the business an increased sense of safety & transparency in the international markets. Cardano has also focused a lot on people who do not have access to financial services. The Cardano Foundation has undertaken various development projects in underdeveloped regions of the globe to promote financial inclusion. 

As decentralized apps are gaining popularity, questions and concerns about the security have led Cardano to make the decentralized app platform more secure. 

What Sets Cardano (ADA) Apart?

Cardano (ADA) is the brainchild of Jeremy Wood and Charles Hoskinson. They had previously worked on Ethereum and, hence, possess a greater understanding of the primary obstacles that Ethereum has been facing. 

Cardano immediately gained traction after its release in 2017 mainly because it addressed the concerns that Ethereum faced with language and virtual machine design. Cardano further set itself apart from the competing coins by being heavily involved in Academia, and it has established major links with Academia. The research integration into Cardano's design is definitely a hallmark of Cardano. 

Originally Cardano could process only ten transactions in one second which posed a problem for the scalability of the coin. A paper was released recently that proposed a unique layer to the solution called Hydra. Hydra can process transactions off the chain and enable Cardano to process as many as a million transactions in a second

Interoperability is key to the mass adoption of cryptocurrencies all over the world, and it is one of the targets of Cardano as it has been striving to expand the interoperability in the cryptocurrency world and across its networks. System upgrade protocols and blockchain governance models are two of such attempts. 

A new system for consensus that is completely unique to Cardano, called Ouroboros, was also introduced. Ouroboros is a Proof of Stake (PoS) mechanism that guarantees increased security. The Ouroboros system randomly selects miners to accept transactions. The system also depends on peer-reviewed research to make certain of sustainability and security of blockchains.

Have you considered investing in Cardano ADA?

Cardano (ADA) Price Driving Factors 

3 Factors That Drive The ADA Price:

Factor 1: Adoption 

As the adoption of Cardano increases, so will its value. Cardano is a relatively new cryptocurrency, and although it has a huge community base, it still has a long way to go. The aim of Cardano is to become a dApp platform and a digital currency that would provide financial inclusion to unbanked people. Cardano, on its launch, garnered huge support and the community continues to grow exponentially. 

Factor 2: Competing coins 

Bitcoin, the first-generation cryptocurrency, is still the market leader. It is the king of cryptocurrencies, rightfully so. For any new, or old coin, establishing itself in the market means heavy competition with the king. And there aren't many coins that will be able to compete with Bitcoin successfully. However, Bitcoin generally has a tendency to pull coins upwards, so a positive correlation exists between Bitcoin and Cardano. So, if all seems well for Bitcoin and the cryptocurrency market in general, then positive things can be expected from Cardano. 

Cardano correlation to Bitcoin

Cardano correlation to Bitcoin. Source: Coinpredictor.

Other coins that have similar structures and features to Cardano include NEO, Block, Lisk etc. These coins pose a threat to its prices and rise in the value of these coins would result in the devaluation of Cardano. Although Cardano has come a long way from Bitcoin, the original coin, the market is dynamic, and it is constantly updated. If Cardano does not keep up with the time, it will not be able to meet new competitors.  

Factor 3: Market forces 

Market forces of supply and demand determine the optimal price level of any commodity. Scarcity is the determining factor over here. The scarcer a good or commodity is, the higher it will be valued. As cryptocurrencies have a restricted supply, demand-side factors are more detrimental to the price determination than the supply side. In the market, when demand and supply meet, that is where optimal price levels are established. Demand can exert upward or downward pressure on prices.   

 

What Is The Future Of Cardano (ADA)?

Future projections for Cardano (ADA) seem to lie on two extremes. Whereas some analysts predict the price to be on a downward spiral, other predictions suggest a price of $5 in about five years' time. Whether Cardano price is going to rise or fall is a million-dollar question. The price of Cardano is highly dependent on the overall performance of the cryptocurrency market. 

Predictions at the beginning of 2020 were optimistic, and it was expected that the value of Cardano would rise up to $2. However, as the year has come almost to an end, the price of Cardano came nowhere near close to its predicted price. Modest predictions for the year 2020 indicated stability around the 40 cent mark which Cardano was successfully able to achieve. This stability indicates future upward trends. 

Cardano has garnered massive community support in a short period of time. Cardano consolidates Engineers, Blockchain Experts, and Researchers, all under one roof, so we can see some genuine turn of events and tremendous potential in future. On the off chance that all works out positively, Cardano could be on the way to become the best blockchain after Bitcoin. 

Price Predictions Of Cardano (ADA)

Cardano has been one of the top ten performing cryptocurrencies and has a market capitalization of $4.84 billion. Cardano (ADA), because of its ranking, has been on the radar of investors since its inception. The unique features of Cardano have put it under the spotlight. One of the things Cardano is known for is its trusted and credible team. The solutions Cardano offered to the shortcomings of Bitcoin and Ethereum was what attracted investors. 

Cardano has recently had upward spikes and achieved a high of around $0.172. 

Cardano price prediction 2021 chart

Cardano price prediction 2021. Source: Previzionibitcoin.

Cardano was quickly launched by many top-ranked cryptocurrency exchanges immediately after its inception and achieved a good following. At the time of launching, Cardano was priced at $0.021. ADA achieved its all-time high at the beginning of 2018 when it climbed to a staggering $1.22. The market capitalization also grew at an exceptional rate and starting from $0.56 million it went up to $31 billion by 2018. 

Experts predict that Cardano could be on a surge from the beginning of the new year. Predictions indicate a bright future for Cardano with some as hopeful as achieving the $2 mark in 2023. By 2025, Cardano might be hovering close to the $3 mark and even cross it if all goes well. 

Many bullish indicators exist in the market that signals towards an optimistic long-term investment scenario. According to experts, prices are expected to double in the next year.  

Cardano 2020 to 2027 price prediction chart

Cardano 2020 to 2027 price prediction. Source: Digitalcoin

 

Is Cardano (ADA) a Good Investment? 

Cardano (ADA) has many distinctive attributes that make it appear to be a good investment.  

Team 

The team of the Cardano is highly reputable and credible. The founders of Cardano had previously worked on Ethereum, and it was through their experience with Ethereum that they were able to design a cryptocurrency with the qualities of Ethereum but none of the shortcomings. The team was able to incorporate research in such a way that it would make Cardano stand out. It is also backed by three reputable organizations.  

Technology 

Cardano has integrated some very advanced level technology into overcoming the challenges of previous cryptocurrencies. It is not just a digital currency but a complete platform for smart contracts and decentralized apps. The Ouroboros allows Cardano to scale with up to 4 million times the energy efficiency of Bitcoin. 

Security 

Cardano (ADA) has unlocked the secret of scalability along with security. The Ouroboros system ensures the security of transactions while being efficient as well. 

Ready to invest in Cardano ADA?

Pros and Cons Of Investing In Cardano (ADA)

Pros of investing in Cardano:

✅  The vision of Cardano is to strengthen the economic system and provide financial services to those who do not have access.

✅  Cardano is backed by strong leadership. The founders also cofounded ETH.

✅  It is a third-generation coin and fills many gaps of BTC and ETH. 

✅  Cardano (ADA) is ranked number 8th in the cryptocurrency market.

✅  It has a unique peer-reviewed research integration system in place.

✅  Cardano has the potential to process up to a million transactions in just one second with Ouroboros.  

✅  The Cardano wallet helps with the interoperability in cross chains.  

✅  The two-layer system of Cardano ensures that transactions and data aren't intermixed as both are stored on different layers. 

✅  Cardano offers increased security and privacy.

✅  The programming language, Haskell, is more precise and dynamic with mathematical verification methods.  

✅  Cardano is self-sufficient as 25% of rewards from mining goes to the treasury where these funds are used for development through on-chain voting. 

Cons of investing in Cardano:

❌  Cardano is relatively new, and it would take it a while to establish itself like Ethereum or Bitcoin.

❌  Cardano faces strong criticism about the on-chain voting system.

❌  Features will be difficult to update or remove.

❌  There isn't ample internal regulation in place for the voting system.

❌  The system is susceptible to trolls.

❌  More features and upgrades are needed for the coin to enable it to be a fully functional platform and not just a digital currency.

❌  There are ongoing issues with Daedalus, the wallet. 

❌  The blockchain of Cardano is under development.

❌  At current, Cardano can only process 257 transactions in one second. 

 

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Key Points 

  • Cardano is a third-generation public blockchain platform.
  • It is ranked 8th in the crypto market with respect to market cap. 
  • The vision of Cardano is to reinstate faith in the global economic system and financial inclusion. 
  • Cardano has integrated peer-reviewed research in its system. 
  • The drivers of Cardano include increased adoption, market forces and other competing coins.
  • Cardano has a unique PoS mechanism called Ouroboros which ensures security. 
  • A scaling solution, Hydra, is currently underway.
  • Cardano achieved its all-time high of $1.22 in 2018.
  • Future predictions suggest a rise to a price level of $5 by the year 2025.

We hope this article has informed you about Cardano and has motivated you to start your investment in the crypto market. Lately, cryptocurrencies have latterly begun to grow more with Bitcoin and Ethereum are being the leaders and being institutionalized.


If you have liked this article, please share it, in case someone else wants to benefit from it. If you want to know more about other cryptocurrencies, take a look at our crypto article sector.

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