Is Cardano a good token to buy?
PLUS: Money is flowing to Ethereum & L2s
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In today's newsletter:
💡 Is Cardano a good token to buy?
📣 BTC could hit $200K before the end of the year
📈 Money is flowing to Ethereum & L2s
Let’s dive in!
💡 Insight
Is Cardano a good token to buy?
The Basics
Cardano is an open-source, smart-contract-enabled Layer-1 blockchain based on peer-reviewed academic research.
It positions itself as a third-generation blockchain designed to improve upon the technology behind Bitcoin (first generation) and Ethereum (second generation) by addressing their scalability, security, and sustainability.
With its focus on formal verification and peer-reviewed advancements, Cardano aims to provide a sustainable and interoperable blockchain ecosystem suited for enterprises, governments, and financial institutions.
Cardano has taken a unique approach to development compared to other smart contract networks. The Ouroboros consensus mechanism allows for stake delegation, while the extended unspent transaction output (eUTXO) accounting model enables native token transfers, scalability, and decentralization.
Key Metrics
Tokenomics
ADA is the native asset of Cardano that is used as the primary medium of exchange when transacting on the network.
ADA’s maximum token supply is 45 billion, and its circulating token supply experiences inflation until it reaches that maximum.
ADA is used for three primary purposes:
💵 Paying transaction fees: ADA is required to process transactions on the Cardano blockchain.
🔐 Staking to secure the network: Holders can delegate their ADA to staking pools, helping to maintain the blockchain while earning rewards.
🗳️ Participating in governance decisions: ADA holders can vote on network upgrades and protocol changes, influencing Cardano's future.
Beyond these core functions, ADA also powers smart contracts and decentralized applications on the Cardano network.
Green Flags
✅ Fees (USD) increased by 254% QoQ to $1.8 million, driven by a 65% increase in average daily transactions that reached 71,500.
✅ DeFi TVL (USD) increased by 94% QoQ to $448.9 million. This was led by Liqwid and Minswap, whose TVL grew 141% and 69% QoQ, respectively.
✅ The market cap of stablecoins increased by 66% QoQ to $23.2 million. iUSD maintained its lead as the top stablecoin, with $9.4 million.
✅ The average daily DEX volume increased by 271% QoQ to $8.9 million in Q4
Red Flags
❌ Average Daily Dapp transactions decreased by 8% QoQ to 14,300 in Q4
❌ DeFi TVL declined by 16% YoY in 2024
❌ Average daily NFT sales on Cardano were down 2% QoQ to 430 in Q4, while average daily NFT trading volume (ADA) decreased 2% to 114,800
❌ Total stake (ADA) declined by 4% to 21.8 billion
Value Investing Ratings
Cardano (ADA) in our last report (based on our value investing framework which aggregates fundamental metrics & value capture metrics) was the sixth best token only behind Solana, Ethereum, BNB, Avalanche, and Stellar.
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📣 Update
BTC could hit $200K before the end of the year
Analysts predict Bitcoin could hit $200K before the end of the year.
The reason behind their bullishness? US reflation is fading and Donald Trump’s tariffs aren’t as bad as some thought, which could trigger a crypto rally to push Bitcoin out of the sideways-trading chop it has found itself in since the President’s inauguration.
“This shift in the macro dynamic towards a weaker dollar and lower yields will form a powerful tailwind for risk, propelling the Nasdaq to ever more record highs as well as mark the start of the next leg higher for Bitcoin.” [Source]
📈 Signal
Money is flowing to Ethereum & L2s
Token inflows measure the rate at which new capital, or liquidity, enters a crypto project’s ecosystem. They can signal growing interest, healthy engagement, and the potential for sustained development.
So, don’t be shocked when the ETH narrative flips over the coming months.
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