Cardano (CRYPTO:ADA) has dropped 63% from its peak last year of nearly $3. But there are plenty of reasons for this exciting cryptocurrency player to head back to those levels — and even move higher. That’s because Cardano is in the very early stages of its story. And one big catalyst may be just ahead.
So, should you buy Cardano while it’s below $2? Let’s take a look at what’s on the horizon — and what features might make this cryptocurrency a good buy.
Five stages of development
First, a bit about Cardano. It’s a blockchain with a native cryptocurrency called ADA. Software engineers are taking Cardano through five stages of development. Today, they are working simultaneously on the final two stages. The goal at the end of the last stage is to become a truly decentralized and self-sustaining blockchain.
A big milestone last year was the implementation of smart contract functionality. That allows developers to build decentralized applications right on the blockchain, using the Plutus language. Right now, more than 2,300 Plutus smart contract scripts exist on the blockchain, according to the Vercel app.
Transaction speed is a big focus for cryptocurrencies because faster transactions result in less congestion across a network, lower costs, and higher satisfaction among users. Today, Cardano can process more than 250 operations per second. That’s more than crypto giant Ethereumwhich processes about 30.
But I have even better news. Cardano is about to get even faster — and more efficient. Software engineers are working on the hydra scaling solution. The idea is to build out hydra heads that can handle specific operations. This relieves traffic on the main network and results in faster transactions across the blockchain.
1,000 transactions per second
Early estimates suggest a single head could process as many as 1,000 transactions per second. Most importantly, though, the hydra system can do the following. It may increase the total volume of data processed at any given time and the speed to finalizing a transaction. And hydra allows all these operations to process at the same time — without interrupting each other.
Cardano’s software engineers haven’t mentioned an exact release date. But talk about progress so far suggests hydra could be launched later this year or in early 2023. Cardano’s peer review system might slow things down. But that’s OK. This system of verifying each update to Cardano should prevent technical glitches further down the road.
So, should you buy Cardano at today’s level? Cryptocurrency is risky. Never invest more than you can afford to lose. But Cardano could climb to $2 or higher again. That represents an 80% increase from today’s price. Cardano has posted far greater gains in the past. And now, it has a catalyst — the hydra upgrade — that could put it back on track to a winning performance down the road.
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Adria Cimino owns Ethereum. The Motley Fool owns and recommends Ethereum. The Motley Fool has a disclosure policy.
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