5 reasons to buy Cardano at recent lows
It sometimes feels like the cryptocurrency world is full of unexpected projects. For example, Dogecoin (DOGE) was created as a joke in a few hours and is now the 11th largest crypto by market capitalization. Corn Gimbal (ADA) made a virtue of doing things differently.
Cardano says it’s the first blockchain to be based on peer-reviewed research. Rather than rushing to be first to market, the folks behind Cardano took their time to get it right. For founder Charles Hoskinson, it’s not about being first, it’s about getting it right and creating a system that people will use.
This is part of the reason Cardano has had a tough five months price-wise – its slow and steady approach isn’t always suitable for investors who want instant results. It reached a high in September in anticipation of its smart contract launch. But the price has since dropped more than 50%, in part because people bought the rumor and sold the news. And partly because the smart contract functionality wasn’t quite what some were hoping for.
There are many others smart contract cryptocurrencieslike Solana (SOL) and Avalanche (AVAX), which have taken market share thanks to their fast processing times and cheap fees. Several outperformed Cardano last year, although more recently Cardano has been one of the few cryptos to make gains. contrary to Bitcoin (BTC)which lost 11.8% in the last 30 days, Cardano gained 7.6%.
Even so, Cardano is still far from its peak. But there are plenty of reasons to be optimistic about what might happen next. Here are five.
1. Cardano has a mission – and a plan
Cardano’s mission is to build a financial operating system for the world. It is a decentralized platform that aims to empower people and give them more control over their data and identities. There are a lot of moving parts, and there’s a tremendous amount of infrastructure needed to make this possible. But Cardano has published a clear roadmap on its website outlining how it plans to achieve its goals. You can follow its progress through weekly updates.
There is a lot of talk about how cryptocurrencies could provide financial services to the billions of unbanked people around the world who cannot access traditional systems. But few projects actually address barriers to access. It is not enough to simply make a wallet or a crypto exchange. Cardano is trying to let people create economic identities on the blockchain. It’s almost like setting up a universal and transparent credit scoring system that would allow even the poorest people to access banking services.
2. Many apps are expected to launch on Cardano
Cardano has over 450 projects in development on its platform, with a number expected to launch in the first quarter of 2022. One highly anticipated application is SundaeSwap, a decentralized exchange where users can trade cryptos and earn yield.
Hoskinson said in a Christmas post on YouTube that he wants to activate the first end-to-end microfinance transaction on Cardano this year. This would mean that someone in the United States, for example, could easily take out a small loan to enable someone in a developing country to start a small business. For that to happen, that person would need a blockchain-based identity, and the Cardano system would need a functioning stablecoin and infrastructure.
Microfinance is central to the vision of empowerment, as it could allow people in some countries to access cash without paying exorbitant interest rates.
3. Cardano is used in the real world
Many cryptocurrencies are inward oriented – they solve problems inside the crypto world or are decentralized finance projects that only generate more crypto tokens. Cardano already has partnerships with governments and organizations around the world, with a view to using blockchain technology to change lives.
For example, last year he announced a deal with ministry of education in ethiopia to store the academic records of 5 million students on the blockchain. This would reduce fraudulent job or university applications, and potentially make it easier for these students to travel abroad or access other opportunities.
4. There are great people behind the project
Founder Charles Hoskinson is a legendary figure in the crypto world and also helped co-found Ethereum. He has put together a huge team of talents. The Cardano Foundation, which is only part of the puzzle, has people working in 15 countries across four continents. Input Output, the company behind the Cardano platform itself, has over 400 people working in 50 countries.
5. You can stake your Cardano
You may have heard of the different methods blockchain networks use to validate transactions. Bitcoin uses the environmentally expensive proof-of-work system, while more modern cryptos like Cardano use a proof-of-stake model. In Proof of Stake, only people who own coins can help validate transactions – and they earn rewards for doing so.
If you hold Cardano, you can bet it and earn passive income. It’s less risky than other ways people can earn rewards, like loan-to-earn products or cash pools.
All cryptocurrencies carry risk
Cryptocurrencies are high risk investments. There’s a lot we don’t know about how this industry will develop and what will happen in the long run. There are many good reasons to buy Cardano, but there is also no guarantee that its price will return to previous highs.
If you buy gimbal, only invest money you can afford to lose, and research the project thoroughly so you understand what you’re getting into. Before buying any crypto, top up your emergency fund and retirement savings – investing in crypto should never precede financial goals that protect your future.
Emma Newbery owns Bitcoin, Cardano, Solana and Avalanche. The Motley Fool owns stocks and recommends Bitcoin.
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