How High Can Cardano (ADA) Go — Crypto Price Predictions

Market Cap & Market Share Analysis

Edit: See my Cardano updates on YouTube here, here, here & here.

For ADA staking and passive income, see this article and video.

Making cryptocurrency price predictions is a form of dark art.

Unlike the discounted cashflow model for equities/shares, there is no consensus on how to value cryptocurrencies.

Bespoke approaches and metrics are used for different use cases. A simple classification for crypto use cases is as follows:

• Bitcoin. Use case: store of value asset that competes with gold.
• Altcoins. Use cases: smart contracts, dApps, DeFi, NFTs and so on.
• Memecoins. No real utility. Gambling and speculation.

Common valuation approaches include looking at: hash rates, network effect, number of dApps, TVL, Metcalfe’s Law and so on. One can spend days debating the merit and relevance of these metrics.

To keep things simple, investors typically use market capitalization as an easy-to-use guide for forecasting and prediction.

Cardano’s native token ADA has a current market cap of roughly $45 billion. If that sounds sensible to you, then a $1.30 ADA isn’t expensive.

Relationship between price and market capitalization

Cardano is a smart contracts-enabled blockchain on which real value is created through hosting ecosystems of decentralised applications (dApps). The ADA token powers the Cardano network, while Cardano’s Mary Hard Fork enabled developers to deploy custom tokens to power their own dApps.

Cardano competes with other smart contracts blockchains like Avalanche (AVAX), Solana (SOL), Polygon (MATIC) and the Binance Smart Chain (BNB).

This means in addition to market cap, comparing ADA’s price and Cardano’s market dominance against Ethereum (ETH) — the de facto smart contracts leader — prove a very useful exercise for price predictions too.