Cardano Price Prediction: Will The Wildcard Prevail? (2024)

In the competitive and crowded world of cryptocurrencies, Cardano stands out. Think of it as a new-generation blockchain designed to be more secure, scalable, and sustainable. The project was founded in 2014 and officially launched its native token ADA in 2017. Cardano offers a platform for building smart contracts (like digital agreements) and creating decentralised applications while claiming to be more secure and efficient than competitors.

Chen says that Cardano is alive with activity, with “135 projects launched and 1,264 projects in various stages of development” on the chain. However, she also adds that it’s not all smooth sailing, noting that “it’s clear that not all projects have flourished”. Regulatory scrutiny and significant advancements in layer 2 blockchain technology further threaten the progress of projects building on Cardano.

While Cardano was built to address the shortfalls of competitors like Ethereum, it has struggled to gain any significant level of adoption. Now that Layer 2 blockchain solutions have arrived on Ethereum, significantly decreasing transaction costs and increasing confirmation speed, Cardano’s once-unique features are no longer a significant catalyst for adoption.

Despite this, Chen notes that “the foundation’s focus on development education, new infrastructure like stablecoins, programming languages, and wallets, and the growth of multi-chain solutions” set the tone for its ambitious future roadmap. A keen focus on next-gen tech, innovative digital coins, and user-centric solutions is at the forefront of this project. However, whether they can deliver on any promises is yet to be seen.

Like many crypto projects, Cardano’s price history chart resembles the path of a theme park roller coaster: teetering highs, followed by precipitous drops. In 2017, the Cardano blockchain and its native token, ADA, officially debuted in the crypto world at $US0.0024.

ADA was originally greeted with scepticism. Chen recalls many detractors dismissing the project as just another “high market-cap sh*tcoin”. However, Cardano would soon defy these early judgments. “One of the pivotal moments for ADA was the Alonzo hard fork in 2021, which unlocked its smart contract capabilities,” says Chen. This technological leap and the 2021 crypto bull market set the stage for ADA’s meteoric rise.

The enthusiasm and anticipation surrounding Cardano’s smart contracts led to ADA’s valuation surging by 30 times. Its market cap touched an impressive $US94.9 billion, which established ADA as a serious contender in the crypto race.

“Such an ascent was distinct,” Chen says. “ADA, during this phase, even managed to outpace giants like BTC and ETH in growth rates.”

Yet, with great crypto highs come inevitable corrections. Post the peak of the Alonzo hard fork in September 2021, ADA faced a downward shift.

“After the Alonzo-driven peak, ADA’s price trajectory began oscillating, leading to the varied trends we observed in 2023,” Chen says.

The final quarter of 2023 saw some life come back to the crypto markets, largely driven by the anticipation of the SEC’s approval of pending applications for spot Bitcoin ETFs. All 11 applications were approved in early January 2024, sending Bitcoin’s price to new all-time highs. You will now need roughly $100,000 Australian dollars to buy one Bitcoin.

While Cardano did not spike to the same magnitude, a rising tide lifts all boats, and ADA has been buoyed by the overall market enthusiasm surrounding the institutional acceptance of digital assets. As of March 21, 2024, ADA is trading at $US.64, almost 180% higher than where it was in October just last year.

Analysing Cardano’s on-chain data provides key insights into its current activity. The total number of transactions has reached 83.6 million, averaging between 50,000 and 70,000 daily. This might seem impressive at first glance, but the differences become stark when placed side-by-side with Ethereum.

Ethereum, being a significant player in the blockchain space, records daily transfers in the millions. In contrast, Cardano’s numbers, while growing, are still just a fraction of Ethereum’s daily activity.

Chen notes: “With Bitcoin surpassing its all-time high, investors have high expectations for other prominent public blockchain projects in the crypto industry to also exceed their historical highs. Currently, Cardano’s price still has a 310% gap from its historical high.”

One primary indicator of a project’s success is the number of developers working on the chain. The renewed sentiment around blockchain projects, such as Cardano, is spurring a surge in activity from developers, which can be seen in the number of new contracts being deployed exploding over the past month.

“The number of smart contracts on Cardano increased by 67% in just three weeks in March 2024, adding 9,671 new contracts, demonstrating the rapid growth and adoption of Cardano’s smart contract platform,” Chen says.

“Additionally, Cardano has become the blockchain with the highest development activity during Q4 2023, surpassing other major crypto projects, including Polkadot, Kusama, Cosmos, and Ethereum. According to Santiment data, Cardano recorded 611.47 GitHub commits in the past 30 days, significantly ahead of Polkadot and Kusama.”

Yet, challenges abound. Despite the fact that over 100 projects are already live and thousands more are in the development stages, only some ventures have found success.

“The TVL (Total Value Locked) in Cardano’s DeFi ecosystem exceeded $450 million in March 2024, marking a 300% rise from last year,” Chen says.

“The driving force behind this growth is the increased interest in other blockchain platforms, as investors seek diversified opportunities and higher returns.” Once again, compared to Ethereum, with a TVL of over $US53 billion, it highlights how far Cardano has to grow to compete.

Chen is cautious when considering Cardano’s price potential.

“In the short term, ADA’s potential to deviate from BTC’s prevailing trend seems restricted,” she says.

“A resistance point near $US0.6 is evident.” Nevertheless, there are reasons to be optimistic.

“Projects like Indigo and Minswap have witnessed significant growth in TVL, indicating healthy capital inflows and increasing investor confidence in the ecosystem’s potential.”

Before we delve into the possibilities, let’s understand two essential market perspectives. The bull case is optimistic, highlighting scenarios where Cardano’s price could rise. In contrast, the bear case offers a more cautious stance, outlining why Cardano’s price might decline. These two contrasting views provide a balanced understanding of potential market trajectories for the project.

The Bull Case

Cardano is not without its strengths and opportunities. The Cardano Foundation has placed a significant focus on development education, creating innovative infrastructure, and expanding multi-chain solutions. These efforts cannot be understated.

Chen is optimistic about certain facets of Cardano’s future: “Cardano’s reputation as an OG cryptocurrency project remains robust. The backing it receives from multiple entities and communities gives ADA a unique price elasticity.” Indeed, this collective support system can act as a springboard for ADA’s potential upward movement.

Additionally, the almost cult-like group of supporters helps to push the project forward in the right direction. Half the battle for many projects is gaining a strong support base from avid users, and for Cardano, this is something that the project has no shortage of. Another question is whether the current level of support is enough to push the project back into the limelight.

The Bear Case

No coin, no matter how promising, is exempt from challenges. Despite Cardano’s concerted efforts in ecosystem development, it still faces obstacles.

As highlighted by Chen, a concerning point is that “Cardano’s ecosystem is presently heavily reliant on its native token, and its user engagement and trading volumes remain moderate at best”. Furthermore, only some projects within the Cardano ecosystem have found success, with many failing to gain much traction. “For genuine, substantial growth, the network needs much more intensified operational efforts,” Chen says.

The rise in popularity of layer 2 blockchains has made many of the lower-cost layer 1 blockchains, like Cardano, virtually redundant. The project must work hard to find its niche in the market among other blockchain projects.

Additionally, uncertainties can’t be dismissed. Factors ranging from the overall development of the ecosystem, and regulatory decisions from bodies like the SEC, to broader macroeconomic conditions, all play pivotal roles in shaping ADA’s future.

Making a definitive judgement about an asset’s investment potential is always tricky, especially in the ever-evolving world of cryptocurrencies. However, we can make an informed assessment based on the available data and expert perspectives.

Chen adopts a measured stance on the future of ADA. She acknowledges Cardano’s robust background, its infrastructure, and the substantial growth in its staking activity. Yet, she also underscores the need for more intensified operational efforts for it to truly flourish.

On the price front, Chen anticipates that “ADA will most likely fluctuate within the $US1 to $3 range”, however, she adds that a significant breakthrough in technological progress may drive its value back above $US1 for a sustained period.

Like any investment, Cardano comes with its set of opportunities and challenges. Its status as an original cryptocurrency project, coupled with the strong support from its various entities and community, offers a sense of stability. Yet, uncertainties stemming from ecosystem development, regulatory environments, and global economic factors should be considered.

For Australians considering Cardano as an investment, it’s always prudent to conduct thorough research, consult with a financial advisor, and approach it as a part of a diversified portfolio. As always, investments in the crypto space should be made with a clear understanding of the risks involved.

This article is not an endorsem*nt of any particular cryptocurrency, broker or exchange nor does it constitute a recommendation of cryptocurrency or CFDs as an investment class. Cryptocurrency is unregulated in Australia and your capital is at risk. Trading in contracts for difference (CFDs) is riskier than conventional share trading, not suitable for the majority of investors, and includes the potential for partial or total loss of capital. You should always consider whether you can afford to lose your money before deciding to trade in CFDs or cryptocurrency, and seek advice from an authorised financial advisor.