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The red-hot cryptocurrency market has cooled off over past the 48 hours after one of the industry’s biggest and most well-known supporters — Tesla (NASDAQ:TSLA) CEO Elon Musk — said his company would stop accepting Bitcoin (CCC:BTC-USD) payments for Tesla cars on worries that Bitcoin mining is bad for the environment. The news sent Bitcoin prices plummeting, as well as many other cryptocurrencies like Ethereum (CCC:ETH-USD), which, in recent weeks, surged while BTC flatlined. But one cryptocurrency kept rallying amid all the turmoil: Cardano (CCC:ADA-USD).
Source: Grey82 / Shutterstock.com
The Cardano price reached a high point of $2.10 Thursday, while household names Ether and Bitcoin gave back double-digits at points, dropping to the $3500 level and $46,800 level, respectively.
Why the relative strength in the Cardano price??
Because unlike BTC and ETH, ADA coin is what you could consider a “green coin” — or an altcoin that is actually environmentally friendly.
You see, the mining of Bitcoin and Ethereum is not very efficient, and therefore, produces a lot of “wasted” energy. Cardano mining, however, is far more efficient due to its differentiated underlying architecture.
This unique feature of Cardano could position ADA coin to continue to outperform over the next few weeks and months while the market continues to fret over the environmental friendliness of cryptos. I expect this will create a stampede toward green coins — of which, Cardano is the biggest and most well-known.
So, are you looking to make a quick buck in the crypto market? It may be time to buy ADA coin.
Read on for a deeper look, and, if you have time, check out the Daily 10X Stock Report for an exclusive look at my favorite technologies and cryptocurrencies to buy.
What Is Cardano: The Green Coin to Buy
To understand why ADA coin is outperforming BTC and ETH at the current moment, we first need to understand the science behind cryptocurrencies.
The process by which new bitcoins are entered into circulation is called bitcoin mining. It is a competition to solve a cryptographic hashing function that any node in the distributed bitcoin network can participate in.
Once a solution is found and verified via a proof-of-consensus algorithm, a new block is added to the bitcoin ledger, which propagates to the entire network. Solving these hashing functions requires a lot of computer power. The higher the compute power, the more electricity required.
That’s true for most all cryptos. The difference between Cardano and Bitcoin/Ethereum is the proof-of-consensus algorithm type each crypto uses.
Bitcoin and Ethereum both use broadly inefficient proof-of-work algorithms, which are basically competitive “winner-take-all” processes. In essence, you have dozens upon dozens of miners all competing to solve a single hashing function.
The miner who solves it first is rewarded. The rest get nothing. Of course, this winner-take-all approach means that, in effect, the compute power of all losing parties is wasted in proof-of-work algorithms.
On the other hand, Cardano employs a “unique” proof-of-stake algorithm.
Proof-of-stake turns the competitive game of proof-of-work methods into a collaborative game, wherein a person can mine or validate block transactions based on their “stake,” or how many coins they hold. Each person does this, independently, so that there are no losing parties and no energy or electricity wasted in the validation process.
Proof-of-stake cryptocurrencies are far more computationally efficient and environmentally friendly than proof-of-work cryptocurrencies.
This is why ADA coin — as a proof-of-stake altcoin — has outperformed both BTC and ETH in the wake of Elon’s “cryptos are bad for the environment” comments.
Green Coins Will Outperform in the Near Term
The crypto market today trades almost entirely on sentiment and headlines.
Over the next few weeks, I imagine that the mainstream media, multiple news outlets and several financial analysts will dig into Elon’s comments. They will analyze whether Bitcoin mining, proof-of-work cryptos and NFTs are actually this generation’s “gas guzzler.”
To that extent, the environmental impact of cryptocurrencies will remain in the headlines and at the top of investors’ minds for the foreseeable future.
So long as that remains true, green coins will likely outperform. And, because investors are broadly scared of investing in obscure tokens, you’re going to a get a lot of folks piling into the most well-known and established green coin in market, and that’s Cardano.
Accordingly, I fully expect ADA coin to outperform in the near-term. Further, I’m also bullish on what I call the “PayPal of Cryptocurrency,” a tiny crypto that could turn into the “Blockchain GitHub.” I cover these and many more in my daily research project Daily 10X.
Bottom Line on ADA Coin
Proof-of-stake cryptos — like Cardano — are much more environmentally friendly than proof-of-work cryptos like Bitcoin and Ethereum. And that could be a big difference as the broader cryptocurrency market starts to bifurcate over the next few months, and separate between winners and losers.
But ADA coin is far from the only the proof-of-stake crypto worth investing in today. In fact, it may be the least exciting and least explosive proof-of-stake altcoin on my buy radar right now.
Which ones am I more excited about?
As I mentioned earlier, I provide high-value, premium analysis of my top crypto picks only in my exclusive research platform, the Daily 10X Stock Report, where we highlight a potential 10X stock pick (or altcoin) every single trading day. Our service has already scored 10X gains in stocks like NIO (NYSE:NIO), Plug Power (NASDAQ:PLUG), and MindMed (NASDAQ:MNMD). I think our next batch of 10X winners will be the cryptos we are highlighting right now.
To read more stories like this, with analysis you can’t find anywhere else on the web, click here to gain access to that service and uncover the best cryptocurrencies to buy today.
On the date of publication, Luke Lango did not have (either directly or indirectly) any positions in the securities mentioned in this article.
By uncovering early investments in hypergrowth industries, Luke Lango puts you on the ground-floor of world-changing megatrends. It’s how his Daily 10X Report has averaged up to a ridiculous 100% return across all recommendations since launching last May. Click here to see how he does it.
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The post How Far Can Cardano (ADA) Rise? The Best ‘Green Coins’ to Buy. appeared first on InvestorPlace.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
