Markets
Is Cardano or Ethereum a Better Investment in 2024?
The markets have seen a sharp increase in the price of Ethereum on cryptocurrency exchanges this week. What’s behind it and what factors can investors consider to determine whether Ether or its friend Cardano is the better buy?
Ethereum will have its birthday on July 30th. It was launched in 2015 to create a “world computer” with the same Web3 blockchain properties as Bitcoin for storing cash and making payments.
Cardano was launched on September 23, 2017 via initial coin offering (ICO) and founded by an Ethereum co-founder, Charles Hoskinson. Today it is the tenth 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 more complex trade-offs to evaluate as they bring an advantage to both cryptocurrencies. Here are 7 key factors at play in the future Ethereum price against Cardano:
1. ETH vs. ADA – Technical Analysis (a draw)
Ethereum price is almost back to its all-time high (all-time high) after seeing a spike this week due to Ethereum spot ETF rumors. Cardano still has a long way to go. This could actually be more bullish for ADA, with more upside room in its price.
THE recent The approval of Ethereum ETF will shake up the entire meta for investing in Ether. If bulls take the price above $4,000, another 12.5% increase would push ETH to $4,500, within an impressive range from 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 predicts $11,800 by 2030. An even more bullish outlook calls for $10,000 of ETH from the end of the year.
In the short term, Cardano technical indicators and weekly moving averages recommend “Sell” on Thursday. Meanwhile, Ethereum seven-day technical indicators recommend a “strong buy,” according to data from Investing.com.
2. Ether Spot ETF – Regulatory Analysis (ETH Bullish)
There’s no denying it. Charles Hoskinson would certainly agree: US regulators appear to favor Bitcoin and Ethereum Above Cardano and other DeFi networks.
The SEC gave the green light to Ethereum futures ETFs in October, revealing that it did not appear to consider Ether to be 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 above May 1: “Furthermore, despite filing a series of lawsuits against cryptocurrency companies since April 2023, the agency has never named Ether as a security in its complaints.”
The SEC’s lawsuit against Ripple has been years in the making (since December 2020) and has not yet been resolved. It’s expensive and leaves the future uncertain for currencies in the government’s sights.
Markets hate uncertainty.
It may not be right, but it is bullish for ETH and bearish for ADA.
3. ADA vs. ETH – Fundamental Analysis (a wash)
Fundamental analysis is the preferred method for investors they are not totally degenerates. Instead of technical analysis of charts or voodoo meme currency economics, the fundamentalist looks at an investment perspective and asks what “The Intelligent Investor” author 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 run the market is a voting machine, but in the long run it is a weighing machine.”
If a company’s expected future revenues discounted to date exceed its current market value, then it may be a good investment. If they match or fall short of the company’s market capitalization, it may be a poor investment.
ADA: $263.8 million TVL (3% annual reward rate. + Annual growth rate of 121%.) / Market capitalization: $16.4 billion
ET $64.9 billion TVL (5.5% annual reward rate. + Annual growth rate of 145%.) / Market capitalization: $453 billion
Looking at the data above without further context, it seems that Cardano would be the winner, because its inflows make up 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 time. currency like Ethereum in the future.
Imbalanced 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 cryptocurrency retail internet markets.
4. Cardano vs. Ethereum – Gas Fees (A No-brainer)
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 more secure. Great institutions like that.
This is one reason why the industry leader, Bitcoin’s slow and expensive network, with low transaction bandwidth, holds its capital so well. In many ways these integrated 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.
However, for newcomers, entrepreneurs, startups, and investors starting with a small amount of liquidity, smart contract blockchain networks with lower fees 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 tie)
Some people at Web3 believe that Ethereum has an ease of use problem. It has become too overgrown with complicated, byzantine layers upon layers, creating a steeper learning curve and potential security threats.
Blockchain advocate Daniel Cawrey wrote in a recent opinion piece on Blockworks:
“Ethereum is becoming a multi-layered lasagna-like system where complexity and fees are pushing people to the sidelines, causing interoperability and security issues.”
While that’s true, just like Ethereum’s higher transaction fees, Ethereum’s complexity could be a reason to be bullish on ETH. It may simply be evidence of the network’s success. As Cawrey acknowledges in the article, the Internet is beginning to realize his “world computer” concept.
Any computer architecture expert would have difficulty explaining this as to A Turing-complete global computer that anyone can use on a peer-to-peer network would become anything but a flying monster of complexity.
6. Ether vs Cardano Whales (ADA Bullish)
A massive 15,000 ETH whale deposit at Kraken on May 18 spotted by Whale Alert suggested that a bear run on Ether by whales could be on the way, but after the SEC approved the Ethereum spot ETF it There was a whale-sized increase in transactions was net positive for the network, according to IntoTheBlock data.
Meanwhile, Cardano whales were extremely bullish on ADA in May. They enhanced participations in Cardano tokens by 11% in one month. Whales tend to be smart with some of the most advanced market analysis and perspectives 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 distinct advantage for Ethereum. While Cardano has meme coins, none of these are noteworthy 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 cryptocurrency markets tend to reward projects that imbue their technology with some meme karma. Maybe an Orange Pill Moon Boys NFT collection or something with a dog on it would do the trick.