ETH vs. ADA: Is Cardano or Ethereum a Better Investment in 2024?

This article compares Cardano and Ethereum based on several factors, including total value locked (TVL), gas fees, ease of use, whale transactions, and memes. Here’s a summary of each section:

As a crypto investor, I’ve noticed an impressive surge in Ethereum‘s price over the past week. But have you stopped to wonder what could be driving this price hike? Let’s delve into some potential factors.

On July 30, Ethereum will celebrate its birth anniversary. Launched in the year 2015, it was designed to build a “global computer” with the identical characteristics of a blockchain as Bitcoin, enabling users to store assets and facilitate transactions.

On September 23, 2017, Cardano came into existence through an initial coin offering (ICO). It was the brainchild of Charles Hoskinson, a co-founder of Ethereum. Currently, it ranks as the 10th largest cryptocurrency by market capitalization.

Ethereum Market Cap (May 22): $451.8 billion
Cardano Market Cap (May 22): $17.2 billion

As a cryptocurrency analyst, I’ve observed some notable distinctions between Ethereum (ETH) and Cardano (ADA), which can influence our investment perspective.

Some of the distinctions between the two networks come with intricate trade-offs, making it challenging to determine which crypto will ultimately prevail. In evaluating Ethereum’s future price versus Cardano, consider these seven pivotal factors:

1. ETH vs. ADA – Technical Analysis (a tie)

The Ethereum price is close to reaching its record-breaking peak (all-time high) following this week’s surge due to Ethereum spot ETF excitement. On the other hand, Cardano still has a considerable distance to cover before it can approach its ATH. This longer journey for ADA might be more optimistic, as there is still potential for significant price growth.

The approval of the Ethereum ETF has the potential to significantly alter the investing landscape for Ether. If bulls manage to push the price above $4,000, an additional 12.5% surge would bring ETH to around $4,500 – placing it not far from the previous all-time high of $4,721, which was reached in November 2021.

As a crypto investor, I’m always on the lookout for insightful predictions about the future prices of Ethereum and Bitcoin. Recently, Forbes shared an intriguing prediction that Ethereum could reach $5,000 by the end of 2024. That’s quite an exciting prospect! VanEck, a well-known Bitcoin ETF issuer, is even more optimistic about Bitcoin, forecasting a price of $11,800 by 2030. And if we consider even more bullish outlooks, some analysts predict Ethereum could hit $10,000 by the end of this year. These predictions are certainly encouraging and fuel my curiosity as an investor!

As a researcher analyzing the short-term trends of Cardano and Ethereum based on their technical indicators and moving averages, I’ve discovered some intriguing findings. According to the data from Investing.com, my analysis suggests that for Cardano, it would be prudent to sell by Thursday based on the weekly span indicators. On the other hand, Ethereum’s seven-day span technical indicators are signaling a strong buy recommendation.

2. Ether Spot ETF – Regulatory Analysis (bullish ETH)

It’s indisputable that U.S. regulators show a preference for Bitcoin and Ethereum over Cardano and other decentralized finance (DeFi) networks, according to Charles Hoskinson’s perspective.

As a crypto investor, I’ve noticed an interesting development regarding the regulatory stance on Ethereum futures ETFs. In October, the SEC gave its approval, implying that they don’t consider Ether as an unregistered security at this time. However, it’s important to remember that the SEC has taken a different approach in lawsuits against various blockchain companies, classifying Cardano and possibly other cryptocurrencies as unregistered securities. This is a significant distinction from their treatment of Bitcoin and Ether.

According to a May 1st article in Fortune Magazine, although the Securities and Exchange Commission (SEC) has filed several lawsuits against crypto firms since April 2023, they have yet to label Ether as a security in any of these legal actions.

As a researcher, I’ve been following the SEC lawsuit against Ripple since its filing in December 2020. The drawn-out legal battle has yet to reach a resolution, leaving a significant cloud of uncertainty over the affected digital currencies. The prolonged legal process is costly and time-consuming, making it a challenging situation for all involved parties.

Markets abhor uncertainty.

It may not be fair, but it’s a bullish factor for ETH and bearish for ADA.

3. ADA vs. ETH – Fundamental Analysis (a wash)

As a fundamental analyst, I delve deeper into the financial and economic aspects of potential investments. Instead of relying solely on chart patterns or the latest meme currency trends, I adopt a more rational approach by asking myself what Benjaamin Graham, as depicted in his seminal work “The Intelligent Investor,” would do if he were making the investment decision.

Graham says:

A shrewd investor recognizes reality and profits from the contrasting perspectives of optimistic and pessimistic markets in the short term. However, over extended periods, the market’s true value is determined by the sum of all its components – the weighing of each investment’s intrinsic worth.

As a crypto investor, I would interpret this as follows: When a business’s forecasted cash flows, discounted back to the present time, surpass its current market worth, it could potentially be a lucrative investment opportunity for me. Conversely, if the discounted cash flows align or fall below the business’s current market capitalization, I might consider it a less appealing investment.

As an analyst, I would present the data as follows:

Based on the given information and without additional context, Cardano seems to have an edge due to a smaller inflow proportion relative to its market cap compared to Ethereum (Cardano’s inflows represent 1.9% vs Ethereum’s 22%). However, this advantage would only hold true if we assume that Cardano will grow at the same rate as Ethereum in the future.

Due to the significant imbalance in institutional adoption between the two, it will be challenging for Cardano to gain traction unless it identifies a compelling use case, distinctive feature or benefit, and crafts a persuasive narrative that resonates with retail markets in the cryptocurrency sector.

4. Cardano vs. Ethereum – Gas Fees (cat’s game)

As a researcher studying the blockchain ecosystem, I’ve observed that Cardano boasts lower and more stable transaction fees compared to Ethereum. However, Ethereum’s higher fees shouldn’t be dismissed as a drawback but rather seen as an added security measure. These increased costs act as a deterrent against misuse of the network for illicit activities that don’t yield financial returns, making it a more secure platform for legitimate transactions. This feature is particularly attractive to large institutions seeking greater security and reliability in their blockchain transactions.

As a crypto investor, I’ve noticed that one reason Bitcoin, being the industry leader, retains its value is due in part to its slower, more expensive network. Its limited transaction bandwidth keeps the capital within the system. In essence, these inherent costs act as a filter, de facto qualifying participants without any bias based on factors other than their ability and readiness to cover the network’s fees.

As a financial analyst, I would advise those new to the entrepreneurial world, including startups and investors with limited funds, that considering blockchain networks with lower transaction fees, such as Cardano, can be a wise choice. Both networks experience fluctuating fees, especially during periods of high network activity.

5. Ease Of Use – Cardano (another tie)

In the realm of Web3, some individuals express concerns about Ethereum’s usability issues. They argue that its intricate and convoluted structure, built upon numerous complex layers, results in a steep learning curve and increased risks for potential security vulnerabilities.

Blockchain advocate Daniel Cawrey wrote in a recent opinion article on Blockworks:

Ethereum is evolving into a multi-layered structure with increasing intricacy and transaction costs, leading some users to explore alternative options and raising questions about compatibility and security.

From my perspective as an analyst, I believe that Ethereum’s complexity, despite leading to higher transaction fees, is actually a positive sign. It’s a testament to the network’s success and growing adoption. As Cawrey points out in his article, Ethereum is starting to live up to its promise of becoming a “world computer.”

A knowledgeable computer architecture specialist might find it challenging to describe in simple terms how a globally accessible, Turing-complete computer network could avoid becoming an intricately complex “spaghetti monster.”

6. Ether vs. Cardano Whales (bullish ADA)

A large transaction involving 15,000 ETH, which was deposited into Kraken on May 18 and detected by Whale Alert, raised concerns among cryptocurrency observers about a potential bearish trend for Ether. However, data from IntoTheBlock reveals that since the SEC’s approval of the spot Ethereum ETF, there has been an increase in significant transactions, which have generally had positive impacts on the Ethereum network.

As a researcher studying the cryptocurrency market, I’ve observed an uptick in buying activity among major Cardano token holders, or “whales,” during the month of May. This group increased their ADA holdings by 11% within this timeframe. Given whales’ reputation as sophisticated investors with advanced analytical tools and market insights, their bullish behavior towards Cardano is a promising sign for the future value of ADA.

https://x.com/intotheblock/status/1790774801277042863

7. Ethereum vs. Cardano Memes (bullish ETH)

As a crypto investor, I’ve noticed that meme coins bring a distinct advantage to Ethereum’s ecosystem. While Cardano does host some meme coins, none of them have gained significant recognition in the market. In contrast, Ethereum’s popular meme coins such as SHIB, PEPE, and FLOKI have made it to the top of the market cap charts.

As a cryptocurrency analyst, I acknowledge that Cardano has effectively created a more simplified and cost-effective alternative to Ethereum. However, it’s essential to recognize that the crypto market often rewards projects not just based on their technological merits but also their cultural appeal, or “meme value.” To potentially tap into this aspect, I would suggest exploring the possibility of creating an NFT (Non-Fungible Token) collection, such as Orange Pill Moon Boys or something with a popular meme involving a dog. By doing so, Cardano could potentially generate buzz and excitement within the crypto community, which could positively impact its market value.

2024-05-25 16:55