Cardano’s ADA token has now become the third-largest cryptocurrency following a remarkable boom that has seen its price double in less than a month.
With a market cap of just under $68 billion at the time of this writing, ADA is locked in a tight race with Binance Coin (BNB) for a place on the podium behind Bitcoin and Ethereum.
On August 15 and 16, ADA overtook its competitor to become the third-largest cryptocurrency in the world. Since that time it has slumped slightly into fourth place as BNB edged forward to a market cap of about $73 billion.
Currently, one unit of ADA is worth $2.10 compared to $433 for BNB. Yet the Cardano token has experienced a meteoric rise over the past month which has seen it explode from $1.03 to a high of more than $2.20 in a matter of weeks.
Bloomberg said the success of this “little-known digital token” was prompted by a boom in decentralized finance (DeFi). What this suggests is that the price surge has been driven by a looming big event for Cardano investors.
On September 12, Cardono will switch on its smart contracts feature which will allow its blockchain to rival Ethereum as a DeFi platform.
“The Cardano aficionados have been awaiting — some impatiently — for what seems like an eternity for some news on smart contracts,” said Antoni Trenchev, managing partner and co-founder of the crypto lending company Nexo.
“Cardano is tussling with no. 2 crypto Ethereum to be the preeminent blockchain offering smart contracts.”
Michaël van de Poppe, a crypto analyst and trader more widely known under the pseudonym Crypto Michaël, claimed ADA is among the “strongest coins out there” and suggested its price could soon surge to $5.
In a video posted to his YouTube channel, de Poppe said:
“What is the target zone if Cardano is going to continue moving? That is very simple. We are looking at a continuation with Fibonacci extension.”
“The next target zones for Cardano in a new impulse wave are $3.35 and $5.00.”
“Is Cardano ready for the run to $5? Yes, I think so. I think the market is heating up for another big wave.”
Cardano boosters believe it could supplement or even replace Ethereum by powering the trade of NFTs.
Charles Hoskinson, the founder of Cardano, has previously hinted that NFTs are on the way, which is likely to allow the price of ADA to grow even more.
Lark Davis, who tweets from @TheCryptoLark, wrote a thread about ADA which claimed the “age of Cardano is well and truly upon us”.
“Soon Cardano will release native DeFi apps, and other apps like Sushi can then integrate with Cardano to capture liquidity,” he continued.
“Cardano already has a niche but growing / thriving NFT market since it enabled the creation of simple tokens earlier this year.”
“NFTs will be able to really take off on Cardano once smart contracts come on board as well since it will allow for decentralized markets.”
He said Cardano’s “greatest strength” is its “large and enthusiastic community,” predicting that it could experience a rally of “a couple hundred percent” following the launch of smart contracts.
“Proving time is here!” he added.
ADA is named after Ada Lovelace, daughter of the poet Lord Byron, who is often hailed as the world’s first computer programmer. Her actual role though in the development of a program for Charles Babbage’s Analytical Engine is disputed.
Cardano uses Proof of Stake and describes itself as a “blockchain platform for changemakers, innovators, and visionaries, with the tools and technologies required to create the possibility for the many, as well as the few, and bring about positive global change”. The blockchain runs on a proof-of-stake protocol called Ouroboros that “improves the security guarantees of proof-of-work at a fraction of the energy cost”.