By any standard, 2022 was not a good year Cardano (ADA: -5.45%), which is currently trading for just $0.31. Crypto is down nearly 77% year-to-date, and 90% from an all-time high of $3.10 in 2021. Despite a number of positive news announcements in recent months, Cardano is having real trouble gaining traction with investors in the market. busy contaminating crypto exchange FTX collapse.
But I still think there’s a lot to like about Cardano, which seems to be extremely underrated right now. Heading into 2023, Cardano is one cryptocurrency I would buy until the rest of the market wakes up to its value proposition.
First and foremost, Cardano is showing strong signs of organic growth despite the onset of crypto winter. According to recent metrics, Cardano now leads all blockchains in terms of overall development activity. Furthermore, Cardano has posted impressive gains in key metrics like daily active users.
Much of this recent burst of activity has been made possible by a series of technology upgrades, including the Alonzo upgrade in 2021 and the Vasil upgrade in September of this year. These improvements make developing on the Cardano blockchain easier and more attractive. They also presented possible new use cases for Cardano. The past two upgrades are particularly important because they introduced smart contracts to Cardano that could fuel a new round of innovation related to decentralized finance (DeFi).
New offers and features
At its developer summit last month, Cardano unveiled a set of new features and offerings to accompany its next phase of development, known as Voltaire. One of the proposals that is getting the most buzz is the launch of two new stablecoins for the Cardano ecosystem. Since stablecoins are the core of DeFi development, this is actually huge news for Cardano. DeFi is one of the areas where Cardano is playing catch-up, so it could become a highly visible area to show some quick wins.
Cardano also appears to be strengthening its position in a number of other areas where it has historically lagged behind the market leaders, such as: Ethereum:. One good example is the non-fungible token (NFT) market, where a recent flurry of activity has pushed Cardano to 3rd place in terms of total trading volume.
Why is Cardano so polarized?
Considering all these developments, it is natural to ask: Why haven’t investors been more receptive to Cardano? The easiest answer is that Cardano has always played the long game. It focused on slow, steady development and an academic approach to building a safe, secure and sustainable blockchain. It doesn’t have a team of high-profile venture capital backers trying to get Cardano to explode out of the gate.
As a result, it can be frustrating to maintain Cardano at times. If you think about the broader crypto market, it seems somehow inexplicable that Cardano’s all-time high is just north of $3. It never had the kind of stratospheric trajectory that attracted get-rich-quick crypto investors. Add in the fact that Cardano co-founder Charles Hoskinson is known for his sharp responses to anyone who complains about the slow pace of development, and it’s easy to see why Cardano is so polarizing.
Cardano is a long-term buy
Although Cardano does not have the explosive advantages of other cryptos, it is a reliable blockchain project that started in 2017. It has a very transparent roadmap for future development, a passionate developer community, a visionary leader (Hoskinson helped co-found Ethereum as well), and a measured, risk-averse approach to blockchain development. Best of all, Cardano has a lot of exciting projects on the way to 2023, giving it more than enough upside to be interesting in the long run.
Based on the above, Cardano appears to be significantly undervalued. Once Cardano’s new foray into DeFi begins to gain momentum, I think investors will finally see some pressure on Cardano’s price. In fact, some traders already expect Cardano to reach $5 within the next 12 months. The time to buy Cardano is now, when investors haven’t yet woken up to the hidden value being unlocked by the world’s ninth largest cryptocurrency.
Dominic Basulto has positions in Cardano and Ethereum. The Motley Fool has positions in and recommends Cardano and Ethereum. The Motley Fool has a disclosure policy.