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Cardano (ADA USD) has been slipping for some time. In fact, ADA crypto is still down 35% since late 2021 when it closed at $1.37.
That means Cardano, the ninth-largest crypto, needs to surge over 54% to match last year’s level. This shows how volatile ADA crypto has been and how much it needs to rise to offset everyone who bought late last year.
ether (ETH USD) only needs to increase by 25.2% to get back to the previous year’s level. That’s less than half the amount ADA crypto needs to move. But of course, Ethereum is over 10 times larger than Cardano. ETH crypto has a market cap of $363 billion versus Cardano’s $30 billion. This means that the larger the market cap, the more stable the cryptocurrency becomes. The higher the performance, the lower the volatility.
Investors should keep this in mind as Cardano’s price is gaining momentum this year. For example, I wrote in a previous article that ADA crypto looks undervalued relative to its Total Value Locked (TVL). TVL comes into play with smart contracts. TVL represents the total amount locked up in staking crypto assets such as smart contracts and deposits using yield and staking apps.
Metrics supporting a surge in ADA crypto
For example, both Cardano and Ethereum support smart contracts, non-fungible tokens, and dApps (decentralized apps). This is particularly the case in finance, where staking and yield farming contracts known as DeFi (Decentralized Finance) apps are used. DefiLlama.com shows that Cardano TVL is now up to $208 million. For comparison, on January 20, it was only $3.2 million.
The point is that if the TVL for Cardano rises, expect the ADA crypto to rise as well. There seems to be a direct correlation between TVL and Cardano’s price. For example, a recent defi app called WingRiders, which is based on Cardano, has gained nearly 8,000% of its TVL in the past seven days, according to network tracking service DeFiLIama.
Another way to measure Cardano’s popularity is to count the number of wallets that contain ADA crypto. For example, as of April 25, according to Google Data Studio, there were 3,286,970 wallets with ADA. A month ago, on March 27th, there were 3,181,172 wallets with Cardano in them. That’s a gain of 105,798 wallets in one month, or 3.32% over the past month.
At that rate, the number of ADA crypto wallets could grow at a 48% cumulative growth rate over the next year. That means ADA crypto could surge by at least 80% of that amount, or 38%, given the buying pressure that comes with buying ADA crypto.
These metrics show that investors in Cardano can expect a higher price for ADA crypto in the coming year.
At the time of publication, Mark Hake held no position (neither directly nor indirectly) in the securities mentioned in this article. The opinions expressed in this article are those of the author and are subject to InvestorPlace.com’s publicity guidelines.
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