Markets
Is Cardano or Ethereum a better investment in 2024?
Markets saw a huge increase in the price of Ethereum this week on cryptocurrency exchanges. What’s behind this and what factors can investors take into consideration to determine whether Ether or its friend Cardano is the better buy?
Ethereum celebrates its 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 money and making payments.
Cardano was launched on September 23, 2017 via initial coin offering (ICO) and founded by Ethereum co-founder Charles Hoskinson. Today it is the tenth largest cryptocurrency by market capitalization.
Ethereum Market Cap (May 22): US$451.8 billion
Cardano market cap (May 22): US$17.2 billion
Certain differences between the two cryptocurrencies are an advantage for one or the other and a good reason to be optimistic or pessimistic about ETH or ADA tokens.
But some of the differences between the two networks are tradeoffs that are more complex to evaluate as generating an advantage for either cryptocurrency. Here are 7 key factors at play in the future Ethereum Price against Cardano:
1. ETH vs. ADA – Technical Analysis (tie)
Ethereum price is almost back to its ATH (all-time high) after soaring this week on Ethereum spot ETF buzz. Cardano has a long way to go. In fact, this could be more bullish for ADA with more upside remaining in its price.
O recent The approval of the Ethereum ETF will shake up the entire Ether investment goal. If bulls push the price beyond $4,000, another 12.5% increase would take ETH to $4,500 – within impressive range of Ethereum’s previous 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 predict $11,800 by 2030. An even more optimistic outlook envisions $10,000 ETH for the end of year.
In the short term, Cardano’s technical indicators and moving averages over the weekly time frame 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)
There’s no denying it. Charles Hoskinson would I certainly agree: US regulators appear to favor Bitcoin and Ethereum about Cardano and other DeFi networks.
The SEC agreed to Ethereum futures ETFs in October, revealing that it did not appear to think of Ether as an unregistered security. However, the US regulator classified Cardano and other cryptocurrencies as unregistered securities in lawsuits against several blockchain companies, ignoring Bitcoin and Ether.
Like Fortune magazine reported in May 1, “Furthermore, despite launching a series of lawsuits against crypto companies since April 2023, the agency has never named Ether as a security in its complaints.”
The SEC’s lawsuit against Ripple has taken years (since December 2020) and is still unresolved. It is expensive and leaves the future uncertain for the currencies that are in the government’s sights.
Markets abhor 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 they are not completely degenerates. Instead of graphical technical analysis or meme currency voodoo economics, the fundamentalist looks at an investment perspective and asks what the author of “The Intelligent Investor”, Benjamin Graham, would do if he were here?
Graham says:
“The intelligent investor is a realist who sells to optimists and buys from 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 revenues, discounted to the present day, exceed its current market value, then it may be a good investment. If they match or fall short of the company’s market value, then it may be a bad investment.
ADA: US$263.8 million TVL (3% annual reward rate + 121% annual growth rate) / Market value: US$16.4 billion
ETH US$64.9 billion TVL (5.5% annual reward rate + 145% annual growth rate) / Market value: US$453 billion
Analyzing the above data without any additional context, it appears that Cardano would be the winner because its inflows represent a much smaller portion of its market cap than Ethereum (0.019 to 0.22), but only if we expect it to grow at the same rate as Ethereum in the future.
The uneven institutional adoption between the two will make this difficult for Cardano unless it finds a use case, a feature/benefit, and a narrative that shakes up the internet retail markets for cryptocurrencies.
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 cybercrimes that don’t pay off, so it’s safer. Big 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 fees.
Yet for newcomers, entrepreneurs, startups, and investors who are starting with a smaller cash pile, lower-fee smart contract blockchain networks like Cardano have an advantage. Transaction fees on both networks are highly variable and peak during periods of high network usage.
5. Ease of use – Cardano (another draw)
Some people on Web3 think that Ethereum has an ease of use problem. It has become too cluttered with complicated and byzantine layers upon layers, creating a steeper learning curve and potential security threats.
Blockchain advocate Daniel Cawrey wrote in a recent op-ed about Blockworks:
“Ethereum is becoming a multi-layer lasagna-like system where complexity and fees are pushing people to the margins, causing interoperability and security concerns.”
While true, just like Ethereum’s higher transaction fees, Ethereum’s complexity could be a reason to be bullish on ETH. It could simply be a testament to the network’s success. As Cawrey acknowledges in the article, the network is beginning to achieve its “worldwide computer” concept.
Any expert in computer architecture would have difficulty explaining as a A Turing complete global computer that anyone can use in a peer-to-peer network would become anything but a flying monster of complexity.
6. Ether vs. Cardano Whales (bullish ADA)
A massive 15,000 ETH whale deposit into Kraken on May 18, detected by Whale Alert, suggested that a bearish run on Ether by whales could be coming, but after the SEC approved the spot Ethereum ETF, a surge in transactions the size of whales he was net positive for the network, according to data from IntoTheBlock.
Meanwhile, Cardano whales have been extremely bullish for ADA in May. They increased holdings in Cardano tokens by 11% in a month. Whales tend to be intelligent, with some of the most advanced market analysis and outlook to know what they are doing, which is positively bullish for Cardano.
https://x.com/intotheblock/status/1790774801277042863
7. Ethereum vs. Ethereum Cardano Memes (bullish ETH)
Meme coins are a definite plus for Ethereum. While Cardano he has meme coins, none of them are notable and have not topped the market cap charts like Ethereum’s SHIB, PEPE, and FLOKI.
Cardano managed to create a simpler, lower-fee Ethereum, but crypto markets tend to reward projects that leaven their technology with some meme karma. Maybe an Orange Pill Moon Boys NFT collection or something with a dog would do the trick.