Cardano continues to keep pace with Ethereum in 2023, but can it ever overtake the industry leader?
Every year, it seems, there's a new blockchain rival that investors think might eventually take Ethereum's (CRYPTO: ETH) place as the top Layer-1 blockchain. In years past, these blockchain rivals have included the likes of Solana(CRYPTO: SOL) and Avalanche(CRYPTO: AVAX). But, due to its strong track record of innovation, Ethereum has retained its market-leading position.
This year, the blockchain that everyone is talking about as a potential Ethereum rival is Cardano (CRYPTO: ADA). Year to date, Ethereum is up 53%, and Cardano is up 50%, so it's almost a dead heat.Let's take a closer look at how the two blockchains stack up to see which one is the better investment right now.
Ethereum's first-mover advantage
Ethereum has the first-mover advantage in just about every sector of the blockchain world. It literally invented the concept of smart contracts, so it's perhaps no surprise that it is still the clear leader in everything from non-fungible tokens (NFTs) to decentralized finance (DeFi). If you take a look at the top-selling NFT collections, for example, almost all of them are Ethereum-based, and it remains the top blockchain by overall NFT sales volume.
Image source: Getty Images.
But the one drawback of Ethereum has always been its performance. There are blockchains that are faster and cheaper to use, and that has left openings for new rivals to emerge. This is the reason Solana and Avalanche first emerged as potential "Ethereum killers." Even after The Merge, Ethereum still relies on a complex network of Layer-2 scaling solutions to process transactions quickly and keep fees in check. The main Ethereum blockchain can still only process 10 to 20 transactions per second. Meanwhile, Solana routinely handles 5,000 transactions per second, and has plans to boost its capacity to 600,000 transactions per second.
New Cardano innovations
That's why some investors are sitting up and taking notice now that Cardano has finally introduced its long-promised Layer-2 scaling solution, Hydra. According to some Cardano developers, Hydra is the key to 1 million transactions per second. That's a performance benchmark that Ethereum has been promising (but failing to deliver) for years. At 1 million transactions per second, the Cardano blockchain would be nearly 15 times faster than Visa's credit card network, which claims to be capable of processing 65,000 transactions per second.
And Cardano has suddenly boosted its profile in the DeFi world, where for years it was a non-player. DeFi is a new priority for Cardano in 2023, and thus far, the blockchain has delivered. It has a new stablecoin, new decentralized exchanges, and new DeFi protocols. Combined, all of these innovations could make it possible for Cardano to create a robust DeFi ecosystem. It's too early to say that Cardano is a serious rival to Ethereum, given that it still ranks No. 18 among all blockchains in DeFi. However, the case can now be made that it's no longer a so-called ghost chain where nothing ever happens.
Who is innovating faster?
At the end of the day, the blockchain sector is just like any other part of the tech industry. Innovation matters, and investors are willing to pay a premium for tokens on blockchains that appear to be innovating faster. Right now, Ethereum is still riding high after pulling off The Merge last year -- a technological feat that some have compared to changing the engine of an airplane in mid-flight. So the innovation bar is high these days. Investors are looking for truly breakthrough innovations, not just incremental improvements.
Ultimately, the answer to the question of which blockchain is innovating faster might come down to performance in newly emerging areas such as artificial intelligence (AI). The blockchain that secures a clear first-mover advantage in AI, for example, could be the one to invest in for long-term growth. Thus far, neither Cardano nor Ethereum has emerged as the obvious market leader, although Cardano does seem to have the makings of an AI strategy.
And the winner is...
Right now, I'm bullish on both Ethereum and Cardano. Both blockchains have seen stellar gains thus far in 2023. But, given Ethereum's track record of delivering performance over a longer period of time and its entrenched status as the market leader, the nod goes to Ethereum as the better buy.
Dominic Basulto has positions in Cardano and Ethereum. The Motley Fool has positions in and recommends Avalanche, Cardano, Ethereum, and Solana. The Motley Fool has a disclosure policy.
FAQs
And the winner is...
Which is better investment, Cardano or Ethereum? ›
As of March 21, 2024, Cardano is priced at $0.64 and has a market cap of $28.8 billion, while Ethereum stands at $3,500 and has a market cap of $420 billion. The substantial difference in market cap and price points to Ethereum's current adoption and market share dominance.
What crypto will explode in 2024? ›
Solana (SOL)
Its ability to support sophisticated decentralised applications (dApps) while maintaining scalability is a significant driver for its potential explosion in 2024. As developers and financial markets look for efficient blockchain solutions, Solana stands at the vanguard of possible bull market trends.
Is Ethereum a good investment Motley Fool? ›
The most direct option is buying Ethereum itself. Because it's extremely volatile, this carries the greatest risk but also the greatest potential profits. Another option is buying Ethereum stocks, including managed funds that invest in Ethereum for you and companies with large exposure to Ethereum technology.
What are the three Cryptos to buy now? ›
I compiled three of the fastest-growing cryptocurrencies you need to look at and see if they're worth betting on.
- Sui (SUI-USD)
- Arweave (AR-USD)
- Popcat (POPCAT-USD)
Many experts believe Cardano is an undervalued investment with significant growth potential in the coming years due to its wide range of applications. The project's innovative approach, strong community support, and prospects for future expansion have garnered attention.
Does Cardano have a future? ›
Cardano ADA Overview
Our real-time ADA to USD price update shows the current Cardano price as $0.464844 USD. According to our Cardano price prediction, ADA price is expected to have a -1.71% decrease and drop as low as by May 05, 2024.
Which crypto will skyrocket? ›
Which Altcoin To Buy in The Next Crypto Bull Run
- Ethereum (ETH) Market cap: $459.16 billion. ...
- Solana (SOL) Market cap: $58.39 billion. ...
- Cosmos (ATOM-USD) Market cap: $4.85 billion. ...
- Kaspa (KAS-USD) Market cap: $3.48 billion. ...
- Stellar (XLM-USD) Market cap: $3.92 billion.
Like BTC, ETH is up sharply so far in 2024, surging 53.6% through April 1. These two cryptos are undoubtedly the best in their asset class. Some market watchers speculate that Ethereum ETFs will be the next step in crypto's mainstream adoption, and if any digital currency is next in line, it's undoubtedly Ether.
What does Warren Buffett think about Ethereum? ›
The biggest reason why Warren Buffett doesn't like cryptocurrencies is that they believe that cryptocurrencies do not generate cash flow or continuous profits, so they think it is an unsustainable investment and a bubble.
One of the best features investors love about Avalanche compared to Ethereum is its relative cost-effectiveness. Like Solana, Avalanche offers transaction fees that are a fraction of the cost, which is rare for other blockchains to offer.
Can Ethereum make you a millionaire? ›
Holding 6 Ethereum (ETH) Could Make You A Millionaire, According to Cathie Wood. With the recent halving and spot exchange-traded funds (ETFs) driving demand, Bitcoin has had the spotlight for much of 2024.
What crypto will make you rich in 2024? ›
The best crypto to make you rich in 2024 is Mega Dice, an online casino with more than 50,000 players and a $50 million monthly wagering volume. With an impressive $300,000 raised on the first day, $DICE emerges as the best crypto to get rich. Mega Dice is already one of the top Solana ICOs.
How high can Cardano go? ›
Cardano's future growth is tied to its roadmap achievements, including the implementation of smart contracts and dApps, challenging Ethereum's dominance. Short-term algorithmic predictions estimate Cardano could reach a new all-time high of $3.19 by December 2024, a 280% increase from current levels.
Which penny crypto will reach $1? ›
Synopsis. Exploring the potential cryptocurrencies like Pikamoon, Dogecoin, Book of Meme, Rosewifhat, and Zilliqa as contenders to hit the $1 milestone. Key factors like utility, viral potential, and clear roadmaps suggest their potential amidst market sentiment and unique tokenomics.
Can Cardano go as high as Ethereum? ›
Is Cardano dead? Cardano is not dead, as it is witnessing major developmental upgrades, which could boost ADA's price in the near future. Can Cardano overtake Ethereum? Even the most bullish of Cardano supporters acknowledge that Cardano will only potentially surpass Ethereum within 8 to 10 years.
Will Cardano reach $100? ›
That would mean there's still a long way to go to $100. The ADA would then need at least one, possibly even two more bullish cycles to reach $100. Cardano therefore only seems realistic at $100 around the year 2030.
Which crypto will boom in 2025? ›
Top 10 Cryptos to Hold Become a Millionaire in 2025💥
- Bitcoin: Bitcoin needs no introduction as the pioneer of cryptocurrencies and the flagship digital asset. ...
- Ethereum: ...
- Binance Coin: ...
- Cardano: ...
- Solana: ...
- XRP: ...
- Polkadot: ...
- Chainlink:
Cardano uses a different staking system than Bitcoin. Plus, it is cheaper to use while taking less time to manage. But Bitcoin has greater adoption, making it easier for people to trade the currency and use it for a multitude of purposes.
