Why this lesser-known crypto left Bitcoin in the dust this week

Crypto investors have no shortage of choice these days.

By some estimates there are more than 18,000 different crypto assets in virtual circulation.

Though the vast majority are tiny. And many are prone to disappearing as readily as they came into existence.

With that in mind, our focus today remains within the top-10 cryptos by market cap.

This crypto left Bitcoin in the dust this week

While most everyone has heard of Bitcoin (CRYPTO: BTC) and Ethereum (CRYPTO: ETH) by now, we’d wager far fewer investors are familiar with Cardano (CRYPTO: ADA).

With a total market valuation of US$37.6 billion, Cardano ranks as the world’s 7th biggest digital token.

And Cardano, up 1% today, has now gained 35% since this time last week, currently trading for US$1.12.

By comparison, the Bitcoin price is up 8% in 7 days, while Ethereum has gained 11%.

So, what does Cardano do?

According to CoinMarketCap, “Cardano is a proof-of-stake (PoS) blockchain platform that says its goal is to allow changemakers, innovators and visionaries to bring about positive global change”.

What’s driving the Cardano price surge?

Addressing the big jump in the Cardano (ADA) price over the past week, Josh Gilbert, crypto analyst at multi-asset investment platform eToro, told the Motley Fool:

Attributed to this spike is Grayscale Investments’ recent announcement of the launch of a new fund, which offers exposure to various smart contract networks outside of Ethereum. Cardano topped the list as the fund’s biggest holding, coming out at 25.35%.

Given that Grayscale Investments currently has around US$43.6 billion in cryptoassets under management, it clearly has the attention of ADA’s active community.

Gilbert said that Cardano’s founder, Charles Hoskinson, may also have helped drive interest in the token.

Hoskinson “recently tweeted that the crypto asset is scheduled for a hard fork for June 2022. The hard fork aims to help grow the Cardano protocol, and significantly increase its transaction throughput,” he told us.

“It’s currently one of the most popular altcoins at eToro Australia, and was the second most traded crypto asset behind Bitcoin in 2021,” he added.

Gilbert sounded a final note of caution to potential investors:

While ADA has been dubbed an Ethereum challenger for years due to its innovative smart contract platform and other decentralised applications, it may start to face challenges once Eth 2.0 officially launches later this year.

The pending shift to proof-of-stake (PoS) from proof-of-work (PoW) protocols is set to make Ethereum transactions faster, cheaper, and far more energy-efficient.

Despite the big boost for the crypto over the past week, the Cardano price remains down 64% since hitting all-time highs of US$3.10 on 2 September last year.

The post Why this lesser-known crypto left Bitcoin in the dust this week appeared first on The Motley Fool Australia.

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The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended Bitcoin and Ethereum. The Motley Fool Australia owns and has recommended Bitcoin and Ethereum. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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