While Ethereum and Bitcoin have touched multiple all-time highs in the last two months, Cardano hasn’t seen any new peaks since September. Launching smart contracts didn’t seem to put much wind in its sails, and its market cap continues to decline.
Slow Period for Cardano
As of September 2nd, 2021, ADA’s price peaked at over $3, and its market cap nearly surpassed $100 billion. This was followed by a steep dropoff on September 7th alongside the rest of the crypto market, when El Salvador’s Bitcoin law took effect.
Less than a week later, Input Output – the team behind Cardano – confirmed the deployment of the Alonzo upgrade. This brought smart contract compatibility to the network, using the Plutus framework. ADA’s price saw a short pump back up to $2.71 in the aftermath but descended back under $2.50 the following day.
Things have been relatively bearish for Cardano ever since. It failed to pump alongside Bitcoin in October and has steadily declined to its lowest price point in 90 days. Its market cap now rests below $50 billion, and it’s lost its position as a top 5 cryptocurrency.
Competition for Cardano
Though CTO Romain Pellerin disapproved of the comparison, Cardano and Ethereum were frequently pitted as competitors by the crypto community earlier this year. Even Pellerin himself framed Cardano as a blockchain that would be “on par with Ethereum” once smart contracts dropped, with a far lower carbon footprint than Ethereum or Bitcoin.
For this reason, Charles Hoskinson – founder of Cardano – even argued that Tesla should accept ADA for payment. In May, Elon Musk announced that his company would cease accepting Bitcoin payments due to the cryptocurrency’s environmental harm caused by mining. As a proof-of-stake chain, Cardano does not require such strong energy consumption.
But while Cardano was waiting for smart contracts, another competitor blockchain – Solana – saw parabolic growth throughout the year. Its proof-of-history consensus model drew immense investor interest and allows for a high volume of TPS and low energy consumption and is now the fifth-highest cryptocurrency market cap.