Cardano vs. Ethereum – Which Coin Should You Buy Now?
Both Ethereum (ETH) and Cardano (ADA) are getting ready to launch some major updates, but the question on most crypto investors’ lips is ‘Which of the two will generate a higher gain?’ While Ethereum is the world’s second-largest crypto, Cardano is rather an underdog – here is a detailed Ethereum vs. Cardano analysis that will answer the question.
Both coins have been outperforming Bitcoin this year. ETH’s price went up from $132 to $241 as of mid-July, or by 82.5 percent, while Cardano has grown by 290 percent, from $0.0330 to $0.1285. On the other hand, Bitcoin is up by a shy 28 percent.
The most interesting fact is that most of ADA’s price rise took place over a short period in May and June. By contrast, ETH/USD has been growing continuously since the historical market collapse on March 12th and 13th.
Somewhat, both coins owe their amazing performance to the general recovery in the crypto industry. However, there’s another aspect: major technical updates rolled out for the coins. Ethereum’s long-awaited 2.0 update has been postponed again, probably until January. In the meantime, Cardano is on time with its July 29th Shelley fork; it is the scheduling and contents of these updates that best clarify the different price patterns of both ETH and ADA.
However, before we look at the price dynamics for the two crypto coins, let’s quickly mention their differences.
The Case in Favor of Cardano vs. Ethereum
Cardano was developed after Bitcoin and Ethereum, and therefore, could learn from their mistakes and create on their strengths. Its founder and CEO, Charles Hoskinson, refers to it as a third-generation cryptocurrency, which means that it already has some of the functions that previous coins are having a difficult time implementing.
Cardano uses a modification of the Proof-of-Stake (PoS) accord algorithm known as Oroboros, which makes the network incredibly scalable. On the other hand, Ethereum only intends to move from the clunky Proof-of-Work (PoW) to the faster, more energy-effective Proof-of-Stake. Therefore, under those terms, ADA is already far ahead.
Another factor we should consider in the Ethereum vs. Cardano race is team cohesion. While ADA is a commercial project, and all the coders and researchers on the team are paid, the Ethereum development team is a mix of communities, mostly unpaid, who argue with each other and come forward with completing ideas.
Cardano network fees are usually lower than those on the Ethereum blockchain, and the transaction confirmation time is about the same. Essentially, the only real advantage Ethereum has over ADA is that it is more popular due to the fact that it appeared earlier, and people are used to it.
There are a few factors at play in ADA’s ongoing surge as well. First, the Shelley upgrade will make the coin a lot more decentralized and autonomous than Ethereum. It will also make it more scalable and energy-effective, which will allow users to delegate their staked ADA and create staking pools.
In addition, there’s a definite roadmap for the next two upgrades. The first, Gougen, will implement smart contracts, making it feasible to develop decentralized applications on Cardano. The second, Basho, will bring side chains for increased scalability. These news improve the already optimistic mood.
Second, strong price resistance is an important factor in the coins surge. As per IntoTheBlock, most of the addresses holding ADA are now ‘in the money,’ which means they purchased it below the current price. This is depicted in the below diagram: the red circles (currently out of money) are a lot smaller than the green ones:
The third significant aspect is the development of partnerships. One new collaboration is with the blockchain protocol Ergo, which will enable Cardano to analyze stable coins and even provide decentralized financial services. Another partnership is with Hyperledger consortium, which includes over 250 blockchain and financial companies.
Ethereum 2.0 Update
As we already mentioned, the main goal of the Ethereum community is to switch to PoS, enabling users to earn rewards for staking their coins and validating transactions. Over 50 percent of ETH holders reportedly want to stake, so the long-term popularity of the Ethereum PoS seems certain.
The update that will implement PoS’ Phase 0 was initially set to roll out in July 2020, but as usually happens with ETH, it has been postponed. Still, Vitalik Buterin says it should happen this year.
The Verdict: Which Coin Will be More Profitable?
Technical analysis are rather optimistic about Cardano at the moment. For instance, Nik ‘Altcoin Trader’ Patel predicts that the price can rise to $0.20, which is a growth of more than 55 percent.
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Research company Weiss Crypto Ratings is of the same opinion: “ADA is one of the most bullish looking price charts of any major crypto assets right now. New 2020 highs, and it looks like it could keep going.”
Considering the regular upgrades published by the developers, Cardano will stick to its schedule and roll out updates frequently, which will be one of the most important aspects of the Cardano vs. Ethereum battle in 2020.
When it comes to the price of ETH, the dominant mood is that of cautious expectation. Because Ethereum is mostly following the price pattern of Bitcoin, and with the delay of the Phase 0 upgrade, the uncertainty is growing.
So, should you buy Cardano or Ethereum?
Overall, ADA seems a more auspicious coin at the moment – at least for short- and mid-term investors. Cardano’s price could go up by as much as 505 percent, while ETH’s price could increase by 15 to 20 percent, which is a rather very realistic target.
Vitaly Dmitriyevich "Vitalik" Buterin is the co-founder of Ethereum, the world's most popular smart contract platform that enables developers to build decentralized applications (at the time of wirting this, ETH has a market cap pf $2B). Prior to his development of Ethereum, Buterin was the co-founder of Bitcoin Magazine.
Eduard Watson Author
An experienced finance writer for more than 10 years, active industry watcher, and gadget enthusiast.