The unstoppable growth of Cardano is based on expectations of the Alonzo update and may continue for another month, experts say.
The date of the Alonzo update is tentatively scheduled for September 12th. Already on rumors of a network update, the ADA token has grown by 50% in two weeks, from $1 on July 20 to $1.5 on August 6. And when the date was announced, ADA had risen another 50%. Analysts supposed that a further price increase is unlikely. As a rule after such rapid growth, the asset is corrected.
Popular trader and strategist Michaël Van De Poppe warned the community about this situation. He recommended waiting until the price will be corrected below $1.4, then to get profit on further growth to $3.35-5. But it is very likely that the strategist is wrong, and Cardano will not drop to $1.4. Investors have paid attention to this cryptocurrency for a long time and believed in its prospects. There are some reasons for this.
The Cardano (ADA) platform was founded by former Ethereum co-founder Charles Hoskinson. Hoskinson parted ways with Vitalik Buterin when the question of Ethereum’s commercial prospects was raised. Buterin firmly refused to commercialize the project, and Hoskinson insisted on just that. After he left Ethereum he was invited to work as the CEO of IOHK (Input Output Hong Kong). So he was able to use the scientific developments of the University of Edinburgh and Tokyo Institute of Technology in the development of the Cardano blockchain.
The first launch of the network took place in 2014. In 2020, a successful Shelley update was carried out, which made the blockchain 100 times more decentralized, so that hundreds of assets could run on it. The Alonzo update will make Cardano a convenient platform for launching decentralized applications and creating decentralized finance (DeFi) projects.
Investor enthusiasm is fueled by Hoskinson’s mindset on the commercial success of Cardano, as well as the fact that the project leader is sure about its advantages over the two leading cryptocurrencies. Hoskinson openly stated that bitcoin will require more and more electric power to maintain the network. And so it happened, since 2017, the energy consumption of the bitcoin network has grown 4 times. As for Ethereum, its transition to the Proof-of-Stake consensus algorithm is certainly the right decision, but its implementation takes a long time.
A big community of application developers speaks in favor of Ethereum. But if Cardano’s update Alonzo will be carried equally well as Shelley update, then it will attract more developers. After all, the Cardano blockchain has been working on Proof-of-Stake from the very beginning. The Cardano team is confident in the stability of the network, stating that academic rigor helps the blockchain to be durable and stable, increasing the chance that potential traps can be anticipated in advance.