THIS COIN IS MISSING A KILLER USE CASE. As a blockchain, Cardano has spent years emphasizing a rigorous research process that leads to careful and collaborative engineering. That development methodology is theoretically a virtue, but it’s not an economic moat that blocks competitors, nor does it imply an appealing investment thesis. A moat only appears when builders choose a chain because switching feels expensive, and for crypto, such moats are pretty much always a competitive advantage.
Today, Cardano is tenuously present in the areas that tend to pull in capital, like decentralized finance (DeFi) apps and stablecoins. That kind of “in the running but only technically so” profile can persist for years without ever leading to investor upside.
So, the one thing to wait for before even considering buying Cardano is for it to demonstrate that it has a niche where it excels beyond the competition. If there isn’t any segment of the crypto sector where the chain’s design produces measurably better outcomes than its rivals, there’s simply no incentive for capital to allocate itself there. Hence the coin’s extreme underperformance relative to other crypto majors over the last three years.
What to watch: Investors should watch two things to see if Cardano is changing for the better in a way that might eventually justify a purchase. First, its core DeFi metrics, like total value locked (TVL), need to rise for multiple quarters in a row. Second, look for signs that the chain is attracting apps that people use for more than a few months. App revenue is one metric to watch, but the number of new apps being launched per month is also a decent indicator, as is the number of monthly active wallet addresses on the chain. Until Cardano starts to fulfill those criteria and dominate a niche, sitting on your hands or looking for other investments is the best strategy.
The blockchain faces a lack of a clear moat and underwhelming price action until it demonstrates a niche where it excels and revives investor interest. Cardano is a blockchain designed for smart contracts, but it is not the only one. It needs to do something better than its peers to succeed. In Crypto: The CEO says this is worth 18 Nvidias. Will this make the world’s first trillionaire? Today, Cardano is tenuously present in DeFi apps and stablecoins, a profile that can persist for years without investor upside.
Investors should watch two things to determine whether Cardano is changing for the better: first, DeFi metrics like TVL must rise for multiple quarters; second, the chain must attract apps used for longer than a few months. App revenue is a metric, but the number of new apps launched per month and the number of monthly active wallet addresses also matter. Until Cardano starts to fulfill these criteria and dominate a niche, investors are advised to sit on their hands or seek other opportunities.
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