Just like with the majority of other cryptocurrencies, the price of Cardano has suffered a crash recently falling from about $3 to less than $0.5 in just about a year. While some traders consider this the end of the token, others welcome such a convenient opportunity to invest in ADA. So should you buy ADA or not? In this article, we analyze the situation and provide a brief overview of major pros and cons.
What is Cardano
Launched in 2017 by one of the Ethereum co-founders, Cardano is a blockchain that uses the PoS (or proof-of-stake) mechanism to sustain a stable and scalable network with many possible uses. ADA is used for creating DeFi applications, various blockchain-based games or entirely new crypto tokens, so it’s not surprising that Cardano is one of the largest tokens by market cap.
One of the most important features of Cardano is that this blockchain supports smart contracts, so its users may use them for various purposes. ADA is the native token of the network, and it can be freely bought or sold on any crypto exchange. That means you can also use Cardano for transactions or for storing value: many investors consider the token a great option for investments.
However, the recent crash may scare off many potential investors: after all, why should I buy Cardano if it can decrease sixfold in a year? Actually, some of these objections may be justified. Let’s check out some pros and cons of investing in ADA right now.
Pros
First of all, Cardano is quite similar to Ethereum, but the former is even more energy-effective since it uses the PoS algorithm. The blockchain also supports more complex smart contracts, so it potentially has even more applications. For example, now Cardano is used very actively for creation of NFTs and entire virtual worlds filled with them called metaverses, and that trend seems to be rather long-term.
Cardano is entirely decentralized, so there’s no authorities which could interfere with transactions, and that makes the blockchain even more secure. And the developers behind the project are professionals committed to the project. All in all, Cardano is an effective, popular, safe and rapidly growing network, but there are still some problems we just can’t ignore.
Cons
Cardano may be great, but it’s not protected from external factors that affect the entire crypto market, including the possibility that the Federal Reserve may tighten its regulations of crypto. And there’s a chance another price collapse may suddenly occur, so keep that in mind.See more research here – Ivan Andriyenko.