Cardano (ADA) is a public, open-source blockchain for building and running smart contracts, and other decentralised protocols. The project was initiated by Charles Hoskinson, a co-founder of Ethereum.
In 2014, ADA launched its network with multiple layers which is designed to be a more efficient alternative to existing Proof of Work networks. In some ways, Cardano is a direct rival to Ethereum in the smart contracts and dApps space. Specifically, Cardano aims to provide a unique third-generation blockchain network that offers solutions to the issues of scalability, blockchain interoperability, and sustainability faced by the likes of Bitcoin.
Looking at how Cardano has performed since its market debut, we see that market-specific news and global events influence its price movements. Let's have a look at the price history of ADA.
In 2017, the Federal Reserve moved to raise interest rates, doing so on three occasions as the effects of the 2008 economic crisis that had engulfed the world finally began to wane. As the Fed wound down its asset purchase program, talks shifted to the possibility of withdrawing post-crisis banking regulations.
An uptick in the stock market followed, with cryptocurrencies also riding on positive news from Japan about Bitcoin. Markets reached record highs and Cardano's price mirrored overall sentiment to spike from $0.05 to $0.12 on 27 November. Although late to the party, bulls rallied and broke above $1.00 to reach highs of $1.18 on 3 January 2018.
Since then, Cardano has looked to cement its position as one of the top cryptocurrencies in the market.
The initial release of Cardano takes place. Charles Hoskinson lays out the project and begins working on it with the IOHK. The ICO raises $62 million.
Phase 1 of Cardano's development, dubbed "Byron", begins with the launch of ADA and the official wallet Daedalus.
Crypto exchanges Bittrex and Binance list Cardano's ADA, opening up the coin to a global market. (The price of ADA increased by more than 120% on 27 November, from $0.05 to $0.12).
Cardano also launches KEVM, the network's first smart contract testnet (The news is not enough to prevent further losses as the bear market continues to bleed cryptos, with ADA slipping from $0.36 to $0.22 over the month).
Cardano Foundation chairman Michael Parsons resigns following an internal rift within the Cardano Foundation Council. Parsons is criticised for perceived nepotism in one of his appointments to the foundation and for lack of transparency. (The bear market sees Cardano price trade lower, breaking to $0.04 30 November).
Cardano partners with the Ethiopian government on a project that aims at using the blockchain technology underlying Cardano in the country's agriculture sector. (ADA price jumps over 30% in three days as it touches highs of $0.09).
IOHK donated $500,000 worth of ADA to the University of Wyoming to support the institution's blockchain lab. (Cardano sees minimal action over the month, with price lodged around $0.05-$0.06).
Cardano's second development stage Shelley goes live via an upgrade and introduces the Ouroboros PoS consensus mechanism. (Price remains around $0.08).
July 26, 2020
Cardano founder Charles Hoskinson predicts that by July 2021 the platform would have hundreds of assets and thousands of dApps running on the network. He points to a growing Cardano ecosystem and the community's readiness to innovate as bullish prospects for the cryptocurrency. (Cardano price jumps from $0.12 to $0.15).
IOHK announces that the third era, Goguen, will launch in October via the Alonzo upgrade. It promises to launch the ability for Cardano smart contracts and decentralised applications. A Rwanda-based NGO also partners with the Cardano Foundation on a crypto charity project set to use ADA. (Cardano's value increases from $1.34 to $1.46).
August 3, 2021
Cardano is listed on Japan-based crypto exchange BitPoint, a critical development given the strict regulatory environment. (ADA/USD value jumps from $1.31 to $1.37).
Cardano is currently one of the best cryptocurrency projects in the blockchain space. But how does it hold up as an investment against fiat currencies and top commodities?
Compare Cardano with Silver
Silver has been around for a long time and its use in the investment space has yet to wane. However, Cardano represents the new technological shift, with its use as a digital currency yet to blossom. While the government can confiscate the metal, the same cannot happen with the digital asset unless holders share their private keys.
In the market, both experience fluctuations when prices go up or down due to various factors. The difference is that Cardano's price can swing wildly multiple times in a day, while Silver's changes are largely within small margins.
Compare Cardano with Natural gas
Cardano is a famous cryptocurrency while natural gas is regarded as one of the best commodity assets in the world. ADA is traded on major exchanges and broker platforms across the globe. Similarly, natural gas trades globally both as a spot and a derivatives asset.
Both Cardano and natural gas have value because of the principle of supply and demand. Cardano and natural gas experience price volatility, but the latter is less volatile. Therefore, ADA carries a higher investment risk than the commodity. Traders might however realise higher gains from Cardano than from natural gas over a shorter period.
Compare Cardano and Ethereum
Both Cardano and ethereum are smart contracts and decentralised applications (dapps) platforms. Ethereum is more popular and already hosts smart contracts and thousands of decentralised applications, which puts it way ahead of Cardano. However, Cardano is more scalable, is set to launch smart contracts, and is already attracting dApps developers.
In the market, both ADA and ETH are widely traded for a speculative reason; as seen throughout 2017 and 2020/2021 bull markets. Though Ethereum's breakout to the all-time high of $4,356.99 on 12 May 2021 still maintains its status as a high-profile crypto, ADA's own spike to $2.45 shows that it has the potential for significant gains in the long term.
Compare Cardano with the US dollar
Cardano is the 6th largest digital asset by market cap while the US dollar is the world's most traded currency. ADA provides for decentralised money, free of any government or any central financial institution's control. This means no one can manipulate ADA's supply even in times of crisis.
Cardano's value, while affected by common market factors, comes from its utility in the blockchain's ecosystem. But the dollar, as with other currencies, is government-controlled. This sees it not just fluctuate according to prevailing market factors, but also political goodwill of those in power, including some of the world's largest banks.
In terms of investment, high volatility makes ADA riskier but more likely to involve higher gains.
While most predictions are based on technical and fundamental analysis, it is important to know that economic, geopolitical, and market news can change price directions influencing the future value of Cardano. In the sections below, we look at price predictions for Cardano for 2022 and over the next five years.
The price of Cardano in 2021 has increased from lows of $0.17 to an all-time high of $2.45, with the price rising 90% in the first two months of the year. By May, ADA/USD had outperformed most altcoins, gaining 740% before the sell-off pressure across the markets saw the price decline alongside Bitcoin, Ethereum and other major cryptocurrencies.
As with other cryptos, Cardano price suffered from negative sentiment arising from a new wave of Covid-19, renewed regulatory pressure from China, and poor economic outlooks for the US and other leading markets.
Despite these factors, Cardano has remained on an upward trajectory and has a positive outlook going into the last quarter of 2021.
For Cardano, the Alonzo upgrade that makes it a full-fledged smart contracts platform is expected to be an exciting prospect for the community as sentiments head north.
Below is a technical outlook for Cardano's price, including predictions from various analysts.
According to one technical analyst, Cardano's recent upside aligns with "ADA's general price history" and that the weekly close above $1.30 might see the cryptocurrency prolong its uptrend.
The weekly RSI is above 50 and the price is trending along an ascending trendline, currently extending above last week's candle close. Bids above the middle curve of the Bollinger Bands will certainly invite fresh buying pressure towards the 61.8% Fib level near $1.90.
The technical picture for Cardano on the daily chart suggests that bulls are in control after holding prices above a long-term horizontal support line near $1.05. The move appears to have invalidated the head and shoulders pattern as the price did not break below the neckline of the projected move.
This move gives Cardano price a positive outlook that could see its price continue higher above the upper trendline of a pennant pattern.
The daily RSI and daily MACD are in the positive zones and if bulls hold above the 50MA ($1.30) Cardano price might break above the trendline and retest the 50% Fibonacci retracement level of the downswing from $2.34 to $0.93 currently located at $1.63.
The upside target over the next few months would then include a 74% breakout, taking ADA/USD past the psychological level of $2.00 to $2.34 and possibly $3.00.
Cardano's price outlook for 2022 takes into account the fact that markets move in cycles and that the 2020/2021 bull cycle will eventually give way to a bearish run. Looking at factors that might influence the coin's value over the next sixteen months, one of the main ones will be the successful implementation of smart contracts.
If it indeed does launch, the fundamental importance of having a working project will play a big role in the demand for the coin and hence its value.
According to a leading institutional analyst, a fully functional Cardano network with smart contracts ability will help rally ADA into the top three biggest cryptocurrencies in the market. Recently, another prominent crypto analyst predicted that Cardano could rally 500% over the next few months to top its all-time high.
Other metrics to look at are the global economic outlook as the world navigates Covid-19 vaccination, the regulatory environment and the general market sentiment.
With these factors in mind, let's look at some Cardano price predictions for 2022.
A veteran trader has suggested Cardano might follow a similar price trajectory as was observed with Litecoin after the 2017 bull market. The analyst shared a chart of Cardano that looks much like LTC's 2018 crash, which means we could see ADA price tanking to new lows.
However, the career trader also admitted that he might be proved wrong.
"I am wrong a lot on a lot of markets. No guts, no glory. Traders who are fearful about being wrong will never become very profitable", he said.
Going into 2023 and beyond, Cardano's price will follow a trajectory that mirrors the general market, as well as fluctuate due to any number of reasons.
But given the nature of markets, a price prediction can't be hundred percent accurate. As such, certain prognoses might change over time due to the influence of market factors such as breaking news.
One analyst had a modest prediction of +72% for Cardano in 2023, with the platform's algorithms calculating a surge from $1.60 to $2.31. For a five-year prognosis, the analysis sees ADA reaching $3.51.
Another is more optimistic about Cardano, suggesting the price could surge to $5.32—$6.09 at the end of 2023. The coin's value would then continue to increase through 2024-2026, with ADA/USD projected to top $11.00 over the next five years.
One other analyst predicts that ADA price will increase gradually through the next five years, with the coin's value reaching $2.81 in 2023, $3.42 in 2024 and $4.05 in 2025.
For more detailed predictions, read our ADA price prediction guide here.
The main price drivers for Cardano in 2021 and the near future will be fundamental developments, the global economic outlook, and overall crypto regulation and adoption. Cardano is already moving closer to a vital network upgrade and has struck various partnerships that continue to highlight its use cases.
Notably, the coin has witnessed some wild price swings since its market debut, as was seen when ADA/USD jumped nearly 60% over four days in mid-May 2021 before crashing 54% over the next three after a brutal rejection at the previous all-time high of $2.45. It reached its msot recent all-time-high in September 2021 when it hit $2.9.
This kind of performance has mostly shadowed the major cryptocurrencies in 2021, with the injection of volatility coming after a range-bound action throughout the last bear market. For the future, the coin's maturing network and community are likely to help tag major cryptocurrencies like Bitcoin and Ethereum, which could see Cardano's value continue to swing wildly.
Such swings are common and price can move in either direction several times in an hour or day, which fortunately accords traders an opportunity to benefit by betting on price trends.
For more on buying ADA check out our Cardano buying guide.