Cardano became one of the most renowned cryptocurrencies in 2021, owing to its phenomenal increase in popularity, investments, and a DeFi ecosystem. However, industry concerns about Cardano are the talk of the town. And quite rightly so.
Cardano’s native cryptocurrency, ADA, is battling to reclaim its former grandeur. Since late 2021, the currency has fluctuated about 50% from its all-time high. The market is divided on whether this is the end of the Cardano bull run or if the asset is on the verge of bursting.
With so much going on, let’s start with the basics and explore what Cardano may look like in 2022.
Cardano's Journey Summarized
Cardano was established in 2015 by Charles Hoskinson, one of Ethereum’s co-founders, and its primary net went online in September 2015. Cardano’s blockchain is continually evolving due to the pro-research and-improvement posture of the people behind it. According to impartial research, Cardano is the most developed cryptocurrency asset in 2021, with over 140,000 development activities! This covers the start of native projects and any upgrades to its blockchain system.
Cardano, like Ethereum, is a blockchain with a smart-contract system. However, it employs a proof of stake methodology and has a nominal transaction rate of 300 transactions per second. Cardano’s native coin, ADA, is utilized for staking and paying transaction fees. The ADA supply chain is limited to 45 billion.
The Cardano ecosystem, as well as ADA pricing, increased gradually but consistently until early 2021. That’s when the cryptocurrency gained widespread attention from investors and DeFi supporters, propelling it to the forefront. Cardano launched many native currencies this year, and renowned crypto organizations launched initiatives in the Cardano ecosystem. New collaborations, expanded initiatives, and fund-raisers for the same were weekly occurrences.
The ADA Bull Run in 2021
In the first nine months of 2021, the price of ADA increased by a whopping 14,000 percent. In early September 2021, the crypto asset reached an all-time high of US$ 3.10. This was a direct outcome of the Alonzo test net, a test of the Alonzo upgrade that would incorporate the Cardano chain’s smart-contract feature. This grandeur, however, was fleeting.
Although the Alonzo test net was successful, it caused concurrency concerns for numerous native programs. Many cryptocurrency observers attribute this occurrence to the start of ADA’s price decline. When the Alonzo hard fork went live, making smart contracts possible on the Cardano chain, the price did not yield the predicted results and continued to fall.
Nonetheless, Cardano increased by 650 % in 2021, compared to Bitcoin’s rise of a little over 57 %.
Why is ADA perhaps declining?
Since the beginning of 2022, ADA has struggled to break and maintain even the US$2 threshold. What is causing ADA’s erratic behavior now? Here’s what industry insiders have to say.
Although the implementation of smart contracts on Cardano’s chain will undoubtedly increase traffic, the blockchain is not yet suitable to host dApps. Because dApps attract both developers and consumers, their lack of availability harms ADA’s pricing.
ADA is experiencing supply and demand problems. ADA supply has surged since mid-2021, with 1.5 billion more ADA circulating in the market. This is due to the Cardano Foundation and other similar subsidiary initiatives and organizations selling ADA regularly to support their activities.
Furthermore, the lack of dApps or similar initiatives to spend ADA further stifles the present supply pool.
So there’s more to do than just spend. This leads us to the following section of the topic.
Will ADA Keep Struggling?
Right now, things are looking up for ADA. ADA’s problems might be over in a few months. And this is why:
#1 Current Projects
Cardano has collaborated with several DeFi businesses. A far larger number of DeFi institutions are preparing to launch initiatives in the Cardano ecosystem. These are expected to go online in the following months, bringing ADA demands to the blockchain to survive and comfortably function on it.
#2 NFTs
The 2021 NFT boom increased consumers owning numerous crypto assets that functioned as payment mechanisms. Cardano benefited from the collaboration last year, and he expects the same this year.
#3 Development
That’s not everything. In terms of development, ADA’s position is as bright as ever. Cardano’s much-anticipated ‘Hydra’ update might be released in 2022. It will allow each staked pool overseer to execute transactions off-chain and report data to the blockchain while using robust cryptography. After that, each pool will handle 1000 transactions per second.
#4 dApps
Crypto experts believe that the addition of dApps in the Cardano ecosystem would catapult the coin to previously unimaginable heights. The Cardano blockchain gradually lays the groundwork for decentralized applications (dApps), beginning with smart contracts and progressing to Hydra.
The Path Ahead
The possibility of Cardano disappearing into history is a far-fetched scenario. Although Cardano has had a few price drops, the situation is expected to improve in the following months. Crypto analysts predict that when Cardano’s acquisitions and planned projects transfer from paper to the blockchain, the currency will replicate its previous bullish performance.
In addition, a rising number of cryptocurrency observers anticipate that by mid-2022, Cardano will have broken the US$ 4 barrier and set a new all-time high. There is also a tiny group of predictors who believe that if Cardano continues on its current path, it will plummet to as low as US$ 0.1. However, given the market interest in the Cardano ecosystem, this is quite improbable.
According to the optimistic Cardano forecast, Cardano will reach US$ 10 by 2025! Because of Cardano’s methodical expansion as a crypto ecosystem in recent years appears to be a feasible scenario.