The next Bitcoin? Why investors are bullish on fast-rising altcoin Cardano

There’s a lot more to the crypto world than Bitcoin.

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The Bitcoin (CRYPTO: BTC) price has slipped back below the vaunted psychologically important US$50,000 level.

Having traded as high as US$50,496 during the past 24 hours, Bitcoin is down 1.4% since this time yesterday, currently trading for US$49,549.

Still, the world’s biggest crypto by market cap remains up 70% since 1 January.

Where it heads next is up for debate.

Taking a technical analysis view, global multi-asset investment platform eToro’s market analyst Josh Gilbert said, “If BTC can break above the next resistance level at $51,000 and hold, then I expect to see further upside as demand increases.”

But there’s more to the world of cryptos than Bitcoin.

A lot more.

Rising altcoin star Cardano claims number 3 spot

Yes, we’re looking at you Cardano (CRYPTO: ADA).

This time last year you could have picked up 1 Cardano for 12 US cents.

Having gained another 2.8% over the past 24 hours, the altcoin is now worth US$2.88. That gives it a market valuation of US$92.9 billion.

That’s enough to vault Cardano into the number 3 crypto spot. It now trails only Ethereum (CRYPTO: ETH) – market valuation of US$391.4 billion – and Bitcoin, with its market valuation of US$928.8 billion.

In other words, if today is the first time you’ve heard of Cardano, it’s unlikely to be the last.

Could this be the next Bitcoin?

While Cardano has a long way to go before it overtakes Bitcoin in terms of market valuation, don’t forget that only 12 months ago it was trading for a mere 12 US cents.

Gilbert said, “We know that investors are bullish on ADA, as it was the most traded cryptoasset globally by eToro investors in Q2 2021.”

According to Gilbert:

While BTC continues to be the most dominant cryptoasset, it has been recently outperformed by Cardano (ADA). ADA has reached new record highs trading at US$2.88, up more than 1,480% year-to-date.

Gilbert adds that, “ADA is the largest altcoin by market cap to reclaim a new all-time high since the crypto sell-off in May 2021.”

Bitcoin is still some 24% below its mid-April record highs of US$64,829. Ether, currently at US$3,334, also remains down 24% from its US$4,382 record high reached in mid-May.

So why all the investor enthusiasm for Cardano?

According to Gilbert:

The Alonzo upgrade for ADA, which will provide smart-contract capabilities to the network, is set to be fully released by September 2021… Once the upgrade is complete, ADA will be in a solid position to challenge Ethereum (ETH) for the De-Fi crown. The price appreciation of ADA with benefits such as staking makes it a standout to retail investors.

Whether Cardano continues its march higher or is due for a sharp retrace remains to be seen.

But for now, it would seem, Bitcoin has a new challenger.

Should you invest $1,000 in Cardano right now?

Before you consider Cardano, you'll want to hear this.

Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now... and Cardano wasn't one of them.

The online investing service he’s run for nearly a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.

*Returns as of August 16th 2021

The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Bitcoin and Ethereum. The Motley Fool Australia has no position in any of the stocks mentioned. 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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