Cardano
Cardano Returns vs S&P
5.30%
Versus S&P
•
20 minutes ago
5.30%
Versus S&P
•
20 minutes ago
6m High
6m Low
Cardano
$0.40
$0.24
S&P 500
4,594.63
4,117.37
Cardano
S&P 500
Does not follow the stock market
Sources: ADA, SPX
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In the Market
Buy individual shares of Coinbase (COIN), the largest exchange for Bitcoin and other altcoins (including Cardano). Coinbase went public back in April 2021.
Highlights
Good For
Value investors looking for a potentially undervalued Ethereum alternative
Time Horizon
Medium to long term
Diversification
Environmentally Friendly
Cardano is a Proof-of-Stake blockchain platform that utilizes the native cryptocurrency, ADA (named after the English mathematician and first computer programmer, Ada Lovelace). Cardano was built by a team of engineers led by former Ethereum co-founder Charles Hoskinson. Its number one purpose was to create a robust, ambitious, and eco-friendly blockchain with similar capabilities as Ethereum. However, many are still waiting for Cardano’s wow factor to truly realize itself. Cardano has the capability for smart contracts, which makes it ideal for DeFi transactions, decentralized apps (dApps) and non-fungible tokens (NFTs). But Cardano’s timing has been a little off, and it hasn’t quite caught on yet as a popular option.
Did you Know
Cardano’s first all-time high of $2.31 in May 2021 was correlated to a tweet from billionaire Elon Musk saying Tesla would no longer accept Bitcoin due to the environmental cost of the electricity used to mine it.
You could consider Cardano the perfectionistic teacher’s pet of the crypto world: Even though it’s not moving as fast as other blockchains like Ethereum and Solana, the team prides itself on a using academic research, peer-review, and formal verification in an attempt to get it right on the first try. However, some say that’s why Cardano hasn’t yet picked up a first-mover advantage and won’t gain enough popularity to win wide scale adoption.
Cardano’s founder, Charles Hoskinson, was one of the Ethereum co-founders, along with Vitalik Buterin. Another founder, Gavin Wood, also split off of Ethereum and went on to found Polkadot.
Considerations
Earning a reputation as a faster, more environmentally friendly alternative to Ethereum (and run by an Ethereum co-founder).
The price of Cardano’s native crypto, ADA, started 2021 at $0.177 and ended the year at $1.377. If you'd purchased $1,000 worth of ADA at the beginning of 2021, it would've been worth $7,780 by the end of the year.
Recent launch of ADALend, Cardano’s decentralized app (dApp), which could create more demand via lending pools—making Cardano a key player in the decentralized finance (DeFi) space.
Compelling do-gooder mission: Cardano says it “exists to redistribute power from unaccountable structures to the margins” and be a positive force for social change and individual empowerment.
Reasons to Invest
While ADA saw some promising growth in 2021, whether it has moonshot potential and staying power remains to be seen.
Some speculate that Ethereum, the OG smart contract blockchain, will beat out the competition thanks to its strong community.
Cardano’s potential has mostly gone unrealized when it comes to real-world applications. Like a kid not living up to their full potential in school, Cardano could experience major success—or just a slow fade.
Drawbacks
How You’re Taxed
Capital Gains
Income Tax
According to the IRS, crypto is a digital asset. Therefore, capital gains rules apply when buying and selling it. Most people pay 15% or 20% capital gains tax when an asset is held for over a year (it’s based on your income threshold and filing status). When you hold crypto for less than one year before selling it for a profit, you’ll get taxed at your regular income tax rate. The IRS doesn’t consider buying a small amount of crypto on a centralized exchange like Coinbase a taxable event. However, when you start trading cryptos for other cryptos or cashing out crypto for fiat money (such as U.S. dollars), there are additional tax considerations.