Is Cardano a Good Investment in 2024?

Eric Huffman | Verified by Medb Kiely-Cuddy

Last updated: May 24, 2024, 06:16 EDT | 11 min read

Cardano is known for its deliberate pace of development. Rather than rush to market with half-baked code, Cardano moves at its own speed, giving thoughtful consideration to the long-term goals based on five sequential eras (phases of development). The project boasts an extremely loyal following and attractive staking rewards, but is Cardano a good investment?

The project was founded in 2017 to address some of the shortcomings of Ethereum at the time, including scalability. At the helm, Charles Hoskinson, a co-founder of the Ethereum project, keeps the community updated and discusses the state of the chain and the industry through frequent fireside chats. In this guide, we’ll explore the history of Cardano (ADA) and look toward the future to see what lies ahead for ADA investors.

How Has Cardano Performed as an Investment?

Is ADA a good investment? To answer the question, let’s begin with Cardano’s performance relative to other cryptocurrencies. Many within the ADA community see Cardano as a long-term investment. If you’re looking for parabolic growth like you might see with the latest meme coins, you may not find that with ADA in the short term. Instead, a steady climb is more likely, albeit with a solid floor due to a loyal following and dependable staking rewards, currently about 3%.

ADA first traded at $0.02 following the initial distribution of tokens between 2015 and 2017. Within three months, ADA traded at $1.31. By the height of 2021’s crypto bull run, Cardano’s ADA token reached a price of $3.10, a 15400% increase. However, like other top projects in the crypto market, Cardano’s price fell dramatically throughout late 2021 and 2022 before beginning to recover in 2023. As of this writing, ADA trades at $0.48.

By comparison, other top-ten cryptocurrencies like Bitcoin (BTC) and Ethereum (ETH) have seen a stronger recovery from their bear-market lows. BTC has gone on to set new all-time highs following the Bitcoin halving and approval of several spot Bitcoin exchange-traded funds (ETFs) in the US. ETH has yet to recover fully, climbing to $3,700 from its lows but still short of its all-time high of $4,700.

During the downturn, ADA investors enjoyed staking yields of up to 5.6%, paid in ADA tokens to grow their positions. The amount of staked ADA has remained stable at more than 22 to 24 billion tokens in recent months, representing about 66% of the supply. By comparison, 25% of ETH is staked. These staking rewards, along with existing tokens, add to investor gains as ADA increases in value.

Cardano Price History Timeline

ADA’s trading price follows a similar pattern to other leading crypto projects that saw a spectacular rise in 2021, followed by a deep rut in 2022 before bottoming in 2023.

1. 2017 – $0.02: ADA’s humble beginnings didn’t last long. The tail end of the 2017 bull market saw prices climb from $0.02 rapidly.
2. 2018 – $1.31: By the beginning of 2018, ADA traded at $1.31. However, the bragging rights on gains wouldn’t last. ADA fell to its original price of $0.02 by 2019, remaining essentially flat until mid-2020.
3. 2021 – $1.48: The 2021 crypto bull run sent Cardano much higher, reaching $1.50 briefly in February.
4. 2021 – $3.10: After setting support at the previous all-time high of $1.31, ADA marched higher, reaching a new all-time high of $3.10 in September of 2021.
5. 2023 – $0.22: After peaking at more than $3.00, ADA fell throughout the bear market, reaching a low of $0.22 in January of 2023 and retesting this level in September.
6. 2024 – $0.48: Late 2023 and early 2024 marked a recovery for Cardano, nearly tripling ADA’s price from the lows before retracing to $0.48.

While ADA investors saw a massive selloff from the 2021 highs, staking was introduced in 2020, giving holders a dependable yield. As prices bottomed, yields increased relative to price, flirting with 6% at times.

Is Cardano a Good Long-Term Investment?

Cardano’s deliberate development schedule speaks to the project’s goal of building a lasting Cardano ecosystem with a powerful protocol that’s both flexible and durable. The project is led by Charles Hoskinson, a cofounder of the Ethereum blockchain, and actively seeks partnerships with businesses, institutions, and governments.

Like Ethereum, Cardano supports smart contracts, making it a fertile ground for builders and developers. Unlike Ethereum, Cardano offers native liquid staking, making it easy for holders to support Cardano’s proof-of-stake consensus mechanism while still maintaining access to funds when needed.

Additionally, Cardano does not use slashing, which can put staked tokens at risk. This makes Cardano an attractive option for safety-conscious investors who want to earn crypto passive income.

Is Cardano worth buying? Let’s look at some of the factors that could make ADA a profitable long-term investment.

Strong and Experienced Leadership

Charles Hoskinson is the face of Cardano, having founded the company that developed the blockchain, Input Output Hong Kong, which has since rebranded to Input Output Global.

Charles has a pedigreed history in the crypto space, having cofounded the Ethereum project, now the largest smart contract platform in the world. Charles is known for his frank opinions and straight talk on all things blockchain and is well-respected for his vision for the Cardano project.

Among Charles Hoskinson’s other accomplishments in the crypto space, Charles was the founding chairman of the Bitcoin Foundation’s education committee and founded the Cryptocurrency Research Group. Charles describes Cardano, his current project, as a third-generation cryptocurrency, with Bitcoin being a first-generation and Ethereum being a second-generation project.

Charles describes the concepts behind Cardano’s third-generation blockchain in a detailed whiteboard video, focusing on how Cardano achieves scalability, interoperability, and sustainability. While an older video, it’s worth a watch to understand the long-range mindset behind the project.

Expanding Partnerships and Use Cases

Cardano’s use cases are more than theoretical. Cardano has already partnered with governments, businesses, and institutions.

• In 2021, Cardano partnered with the Ethiopian government to create a blockchain-based student credentialing system.
• In 2023, Cardano teamed up with Petrobras, Brazil’s state-owned oil company, to promote blockchain education and study ways to utilize blockchain technology in the energy space.
• In 2024, the Dubai Police partnered with Cardano to secure data for criminal investigations.
• According to Frederik Gregaard, CEO of the Cardano Foundation, several US states have also approached Cardano to discuss how blockchain could be used to secure voting in elections.

While chains like Ethereum and Solana focus on decentralized finance applications (and a fair amount of meme coin trading), Cardano is partnering with governments and businesses to provide blockchain solutions that improve everyday life, particularly in developing countries. However, Cardano’s support for smart contracts means that the Cardano blockchain can also host the types of decentralized applications that made Ethereum and Solana so popular.

Energy-Efficient PoS Algorithm

Cardano uses an energy-efficient proof-of-stake (PoS) consensus mechanism to secure transactions on the blockchain. Cardano describes the Ouroboros protocol as “provably secure,” comparing the security of the Cardano blockchain to that of Bitcoin’s highly secure blockchain. A 2019 whitepaper details the security of the protocol. However, because it doesn’t use mining, Ouroboros is up to four million times more energy efficient than Bitcoin’s mining-based security.

Ouroboros used slot leaders, validators that maintain blocks for transactions, much like a miner does in the Bitcoin protocol, but without the computational power required by Bitcoin mining. These slot leaders can also maintain multiple blocks on multiple chains, making Cardano much more efficient and scalable compared to most popular blockchains.

What Does The Future Hold For Cardano?

Cardano’s multi-layer structure makes it extremely flexible, allowing a multitude of applications ranging from blockchain-based data storage to DeFi applications. Promising new initiatives like Cardano’s Midnight blockchain can address privacy concerns while maintaining blockchain-based accountability.

Cardano separates the Cardano Settlement Layer (CSL) from the Cardano Computation Layer (CCL), allowing fast settlements and validation while also enabling support for multiple blockchains. Governments, institutions, or businesses can build their own computation layer while securing data and transactions with Cardano’s CSL. Midnight is an example of this partner-chain implementation, securing transitions through Cardano while maintaining data privacy.

Cardano separates its roadmap using eras, each of which brings new functionality or efficiencies to the blockchain. In the current and final named era, Voltaire introduces governance, further decentralizing the Cardano network. What began as a blockchain fostered by a well-funded corporation will become a blockchain governed by and for a worldwide community.

Cardano’s roadmap also includes support for sidechains, a strategy to offload computational work to improve throughput. With enhanced scalability, availability of data privacy through Midnight, support for partner chains, and robust smart contracts, it’s difficult to imagine a blockchain-based application in which Cardano wouldn’t excel.

However, support for the blockchain is still growing. For example, Cardano doesn’t currently have a major fiat-backed stablecoin like USDC or USDT. The absence of a well-known stablecoin hampers DeFi development on the chain. In the interim, USDM, a fledgling fiat-based stablecoin, and DJED, an algorithmic stablecoin, are on the network, but notably, both coins have lost their peg from the US dollar under stress.

Conclusion – Is ADA a Good Investment?

ADA likely fits the investment goals of someone who prefers slow but reliable price appreciation. Based on past performance, ADA may not perform like Solana or the latest meme coin that fluctuates wildly due to crypto market trends. However, many see Cardano as a more robust platform that will survive and thrive in the long term. In the interim, ADA holders can stake their tokens to earn a yield, building their Cardano stack for a market that rewards patience.

FAQs

Can Cardano hit $10?

Some predictions see Cardano reaching as high as $10. However, these higher goals extend to a longer time horizon. If you’re able to wait until 2030, it’s possible for ADA to reach $10 or higher.

How high can Cardano realistically go?

Some experts predict prices as high as $10 for Cardano’s ADA token. Significantly higher prices for Cardano likely require more news about partnerships or new implementations. For example, the addition of a major stablecoin like USDT or USDC could cause Cardano usage to skyrocket, driving the price of ADA as well.

How much will 1 Cardano be worth in 2030?

Price predictions for Cardano by 2030 range from $2 up to more than $10. However, holders of the ADA token can stake their tokens to earn a yield. This means 1 ADA will generate additional ADA tokens, increasing your return over a longer time period.

What makes Cardano a better investment than other cryptocurrencies?

Cardano’s scalability makes it a better solution than Ethereum for many applications. Additionally, the protocol’s Ouroborus consensus mechanism makes it 4 million times more energy efficient than Bitcoin while offering comparable transaction security.

References

• U.S. ETF launches set early record in 2024, helped by spot bitcoin funds (reuters.com)
• SECURITIES AND EXCHANGE COMMISSION against COINBASE, INC. (sec.gov)
• Charles Hoskinson (iohk.io)
• IOHK | Cardano whiteboard; overview with Charles Hoskinson (youtube.com)
• Ethiopian Education Minister Confirms Cardano Blockchain Partnership (yahoo.com)
• Cardano Foundation Partners With Brazil’s State-Owned Oil Company for Blockchain Education (finance.yahoo.com)
• Inside Cardano’s Vision: CEO Frederik Gregaard Talks 2023 Milestones & 2024 Goals (youtube.com)
• Cardano (ADA) Price Prediction (binance.com)

About the Author

Eric Huffman

Eric Huffman's background includes a decade plus in business management as well as personal finance industry experience in insurance and lending. A strong understanding of consumer finance combined with a consumer advocate stance brought Eric to the crypto industry, where he writes articles and guides aimed at making crypto easier to understand.

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