Is Cardano or Ethereum a better investment in 2024?

Markets saw a big rise in the price of Ethereum this week on crypto exchanges. What’s behind it and what factors can investors consider in determining whether Ether or its friend Cardano is the better buy?

Ethereum has a birthday on July 30th. It was launched in 2015 to create a “world computer” with the same Web3 blockchain properties that Bitcoin has for storing cash and making payments.

Cardano was launched on September 23, 2017 through an initial coin offering (ICO) and was founded by an Ethereum co-founder, Charles Hoskinson. Today it is the 10th largest cryptocurrency by market capitalization.

Ethereum market cap (May 22): $451.8 billion
Cardano market cap (May 22): $17.2 billion

Some differences between the two cryptocurrencies are an advantage for one or the other and a good reason to be bullish or bearish for ETH or ADA tokens.

But some of the differences between the two networks are trade-offs that are more complex to assess as advantages for either crypto. Here are 7 key factors at play in the future price of Ethereum vs. Cardano:

1. ETH vs. ADA: Technical Analysis (Tie)

The price of Ethereum is almost back to its ATH (all time high) after the local Ethereum ETF buzz increased this week. Cardano has a long way to go. This could be more bullish for ADA, with more upside to its price.

The recent approval of the Ethereum ETF will shake up the entire meta for investing in Ether. If the bulls break above $4,000, another 12.5% ​​increase would push ETH to $4,500, within striking range of the previous Ethereum ATH of $4,721 in November 2021.

Forbes recently mentioned an Ethereum price prediction of $5,000 by the end of 2024. Bitcoin ETF issuer VanEck predicts $11,800 by 2030. An even more bullish outlook predicts $10,000 ETH by the end of the year.

In the short term, Cardano technical indicators and moving averages for the weekly period recommended “Sell” on Thursday. Meanwhile, Ethereum technical indicators for the seven-day period recommended “Strong Buy”, according to data from Investing.com.

2. Ether Spot ETF: Regulatory Analysis (Bullish ETH)

It cannot be denied. Charles Hoskinson would certainly agree: US regulators appear to be favoring Bitcoin and Ethereum over Cardano and other DeFi networks.

The SEC accepted Ethereum futures ETFs in October, revealing that it did not appear to think of Ether as an unregistered security. However, the US regulator has classified Cardano and other cryptocurrencies as unregistered securities in lawsuits against various blockchain companies, while ignoring Bitcoin and Ether.

As Fortune magazine reported on May 1, “Also, despite launching a series of lawsuits against crypto companies since April 2023, the agency has never named Ether as security in its complaints “.

The SEC lawsuit against Ripple has been going on for years (as of December 2020) and has yet to be resolved. It’s expensive and leaves the future uncertain for currencies under the government’s crosshairs.

Markets hate uncertainty.

It may not be fair, but it is bullish for ETH and bearish for ADA.

3. ADA vs. ETH: Fundamental Analysis (a wash)

Fundamental analysis is the preferred method of investors who are not total degenerates. Instead of technical chart analysis or meme currency voodoo economics, the fundamentalist looks at an investment perspective and asks what would “The Intelligent Investor” author Benjamin Graham do if he were here?

Graham says:

“The intelligent investor is a realist who sells to the optimists and buys to the pessimists. In the short term, the market is a voting machine, but in the long term it is a weighing machine.”

If a company’s expected future earnings discounted to the present exceed its current market value, then it may be a good investment. If they match or fall short of the company’s market cap, it may be a poor investment.

ADA: $263.8M TVL (3% Annual Reward Rate + 121% Annual Growth Rate) / Market Cap: $16.4B
ETH $64.9B TVL (5.5% Annual Reward Rate + 145% Annual Growth Rate) / Market Cap: $453B

Going by the above data without any further context, it looks like Cardano would be the winner, because its flows represent a much smaller part of its market cap than Ethereum (0.019 to 0.22), but only if we expect it to grow at the same time . rate as Ethereum in the future.

Unbalanced institutional adoption between the two will make this difficult for Cardano unless it finds a use case, feature/advantage, and narrative that shakes up the Internet’s retail markets for cryptocurrency.

4. Cardano vs. Ethereum: Gas Fees (Cat Game)

There are lower and more predictable fees on Cardano, but higher fees on Ethereum are also a feature, not necessarily a bug. They make it more expensive to misuse the network for cybercrime that doesn’t pay, so it’s safer. Great institutions like that.

This is one of the reasons why the industry leader, Bitcoin’s slow and expensive network with low transaction bandwidth, holds its capital so well. In many ways, these built-in costs qualify participants better than Know Your Customer policies and automatically and without discrimination on any basis other than ability and willingness to pay network rates.

Even for newcomers, entrepreneurs, startups, and investors starting with a smaller stack of cash, lower-fee smart contract blockchain networks like Cardano have an advantage. Transaction fees on both networks are highly variable and increase during periods of high network usage.

5. Ease of use – Cardano (another tie)

Some people at Web3 believe that Ethereum has a problem of ease of use. It’s over-packaged with complicated byzantine layers on top of layers, creating a steeper learning curve and potential security threats.

Blockchain attorney Daniel Cawrey wrote in a recent opinion piece on Blockworks:

“Ethereum is becoming a multi-layered lasagna-like system where complexity and fees drive people to the sidelines, causing interoperability and security issues.”

While it’s true, just like Ethereum’s higher transaction fees, Ethereum’s complexity may be a reason to be bullish on ETH. It could simply be a test of the network’s success. As Cawrey acknowledges in the piece, the web is beginning to live up to its “world computer” concept.

Any computer architecture expert would be hard-pressed to explain how a Turing-complete global computer that anyone could use on a peer-to-peer network would become anything but a flying spaghetti monster of complexity.

6. Ether vs. Cardano Whales (bullish ADA)

A massive whale deposit of 15,000 ETH on Kraken on May 18th spotted by Whale Alert suggested that a low could be coming to Ether for whales, but after the SEC approved the spot Ethereum ETF, an increase in whale-sized transactions it has been net positive for the network. , according to data from IntoTheBlock.

Meanwhile, Cardano whales have been very bullish on ADA in May. Cardano token holdings increased by 11% in a month. Whales tend to be smart money with some of the most advanced market analytics and insights to know what they are doing, so this is positively bullish for Cardano.

https://x.com/intotheblock/status/1790774801277042863

7. Ethereum vs Cardano Memes (ETH Bullish)

Meme coins are a definite plus for Ethereum. Although Cardano has meme coins, none of them are notable and have not topped the market cap charts like Ethereum’s SHIB, PEPE and FLOKI.

Cardano has managed to make a simpler, lower-fee Ethereum, but crypto markets tend to reward projects that bring their technology with a bit of meme karma. Maybe an Orange Pill Moon Boys NFT collection or something with a dog would do the trick.

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