Factors that determine the price of Cardano
Price instability is an essential phase in the growth of altcoin. Unlike the stable coins, or fiat that have a seemingly stable price, altcoins don’t, and that’s what makes them unique. For investors that engage in leveraged trading, the inability of altcoins not to have a steady amount is what makes them earn. Irrespective of the present market situation (either bear or bull). If it’s a bear season, investors will rather sell short than buy long. Hence, leverage trading on altcoins is how most investors and institutions make their bucks.
Altcoins like Cardano price is greatly influenced by several factors, and these factors could range from market forces to whales interaction in the market. Some areas a result of organized FUDs. In general, these factors either set the coin up for the sky or kill the project peradventure it doesn’t have a genuine use case or adoption rate. Cardano is one of the hardiest crypto coins that have not only found its way up the charts but has consistently been occupying the position and is currently in the top 5. Occupying the 4th position till presently. These factors, however, have their effect on the price of the coin, and they include the following
Coins value and its network:
You should note that there will be coin without a network as the coin is deployed on the network to enhance efficiency. Same way, the network can’t work on its own without a network in play. The value of a coin and its network have a direct impact on the price of the coin. Once the network and the coin have been successfully integrated and smooth running of the blockchain, it becomes normal for the price of the coin to increase since the network is smooth running.
The adoption rate by users becomes exponential as the relationship between the coin and its network is smooth and running. The influence of the coin on the network is considered negligible. Hence, the value of the network can be expressed by the price of the coin. The value of the coin (price) and that of the network will always remain high with maximum user adoption. The user adoption also depends on the rate at which the network process transactions or the workload. Inversely, Cardano’s price is influenced by the ADA network, and ADA’s network undergoes congestion from Cardano’s price. Due to the number of transactions going on the blockchain.
Cardano’s network capabilities are one of the secondary functions of ADA that influences the coin price. Cardano allows a stable coin to be created and backed on the ADA coin. This adoption has a huge on the price of Cardano. The possibility of transmitting these stable coins and their creation increases the network’s importance since the network ensure the coin’s value and significance. Stable coins will remain stable because of their rate of adoption. A lot of investors make use of a stable coin to acquire several other coins. Usability index and adoption have driven the price of Bitcoin to skyrocket. Bitcoin has quite a number of stable pairs making it easy to trade it with other coins.
The Cardano network will increase the volume of transmitted values and process several transactions since it transfers ADA coins and transacts stable coins. For instance, if there’s an increase in the demand for ADA stable coin, it will increase the network’s capability, which keeps the pressure on the price of native ADA coin.
Smart contract deployment:
Cardano is a third-generation cryptocurrency that has the capability of running smart contracts even better than ethereum. It should be noted that Charles, the founder of the Cardano network, was one of the developers of Ethereum, so he made sure the deployment of smart contracts on the Cardano network is more enhanced than the ethereum network.
Once a smart contract is deployed on the Cardano network, it will put pressure on Cardano’s price, making it shoot up. Smart contracts give the opportunity of adding more purpose and features to the ADA coin. The adoption of a smart contract on the Cardano network is yet another factor that determines the price.
The factors mentioned earlier are not the only factors responsible for the increase in the price of Cardano. Other factors could also help predict the price of Cardano as well as how the chart will look in upcoming years. As mentioned earlier, these factors could be used to pull ADA into being bullish but, if mismanaged, could cause FUD to draw down the price of Cardano. Currently, the price of Cardano is $1.66, and it can do much more.