The leading horses in Krypto may be galloping along, but the real race is happening a few Thoroughbreds behind the two leaders. Cardano (CRYPTO: NO) and Solana (CRYPTO:SOL) are neck and neck as the fourth and fifth most valuable cryptocurrency tokens by market cap after retiring a pair of stablecoins hugging a dollar bill. They are also the two largest faith groups hoping to fall ether‘S (CRYPTO:ETH) Dominance in blockchain technology used in decentralized apps.
Cardano has had the lead over Solana for most of the past year in terms of market cap. A surge in Solana in the fall ended with Solana finally overtaking Cardano in early November. It didn’t last. The renewed interest in Cardano shows that this denomination stands out as one of the few cryptocurrencies to surge higher over the past month. Cardano regained its lead over Solana late last week and the battle for market cap continues.
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It’s a fight anyone can win
Solana temporarily overtook Cardano in November as it made new all-time highs. Cardano had peaked two months earlier. The two Proof-of-Stake protocols played with market caps of $70 billion and unfortunately, the sharp correction in the crypto markets is taking place to the point that today’s fight is taking place at much lower levels.
Cardano’s market cap hovered around $46 billion as of Thursday morning, while Solana remained close to $44 billion. The gap has closed over the past day, but not optimally. Cardano is down 6% in the past 24 hours, with Solana lucky to be marching in place.
The market cap battle is interesting, but the real battle isn’t just about which fast-growing crypto is ahead of the rest. The real opportunity here is to break free from Ethereum’s dominance in decentralized finance. Ethereum is the undisputed leader with its blockchain-powered smart contracts found at the heart of more than 3,000 widely deployed decentralized apps.
The catch with Ethereum is that it is finally vulnerable. A popular metric for measuring success in this market is total value locked, essentially the sum of all assets currently deployed in a given protocol. A year ago, Ethereum held more than 95% of the total value locked. Six months ago it was just under 75% of the market; now it’s just over 60%.
Solana and Cardano aren’t exactly second and third on this list right now. Solana is close and Cardano has a lot of ground to make up. However, the recent upgrades of the two leading cryptocurrencies have positioned them strongly to gain market share. Ethereum is popular and a pioneer in smart contracts on the blockchain. However, Solana and Cardano revolve around Ethereum in terms of processing speed, the number of transactions they can process, and the ultimate cost of completing a transaction.
There doesn’t have to be a single winner. Solana and Cardano — as well as Ethereum — have all delivered strong, wealth-altering returns over the past year. Just don’t limit your crypto-hunting expeditions to the two most valuable currencies by market cap. A lot of exciting things are happening just below that surface.
This article represents the opinion of the author, who may disagree with the “official” endorsement position of a Motley Fool premium advisory service. We are colourful! Challenging an investing thesis — including one of our own — helps us all think critically about investing and make decisions that help us be smarter, happier, and wealthier.
