Is this Cardano’s big breakout year?

2021 is a year of optimism for Cardano (ADA) holders. In a recent Forbes article, Billy Bambrough quotes Nigel Green, the CEO of the deVere financial advisory group as saying, “Cardano is now just behind the major headline grabbers Bitcoin and Ethereum. I believe that the price of Cardano will reach all-time highs in the next month, hitting more than $3.”

The drivers of Cardano’s price

Green points to what he believes are the “three main drivers” pushing the Cardano price higher. These are the “broader crypto market rally,” a September upgrade that will give the Cardano smart contract a functionality similar to Ethereum’s, and Cardano’s green energy credentials compared to Bitcoin.

At the time of writing, Coinmarketcap lists Cardano’s price at $2.82, with a high of $2.94 in the last 24 hours and a place ranking of #3. Back on the 13th May 2021, Cardano’s token ADA broke an important all-time-high by hitting the $2 mark.  Plus, it was the only top-ten cryptocurrency rising in value during a historic sell-off period. Remarkably, given its price, it is the fourth most valuable token in the world.

Cardano is the new Ethereum

Isaiah McCall writes, “I’m confident it will be the next Ethereum and have a massive role in web 3.0,” and if he is correct, it may be a good time to add Cardano to your portfolio before the price rises even more.

Cardano community members believe that one day ADA will reach $100. To do that, it would need a market cap of $3 trillion. That’s an issue, as Bitcoin’s market cap has a 1 trillion market cap and has been around since 2009. To put this in perspective, Cardano is 4-years-old and has a current market cap of $61 million.

Cardano’s battle will not really be with Bitcoin, which serves an entirely different purpose. Instead it will be with Ethereum, and Cardano has already positioned itself as the ‘Ethereum killer’ (or its fans have). This does make it sound as if it is a heavyweight boxer looking for a title fight.

Both Ethereum and Cardano are smart contract platforms, and McCall says they “stand to become crypto-Google (and maybe crypto-Yahoo).” Google’s market cap is $1.5 trillion, but McCall suggests that the smart contract platforms can double that.

However, here is what you need if you fancy becoming a Cardano (ADA) millionaire. Based on ADA reaching $100, (it’s just under $2 at the moment) you would need to buy anywhere between $15,000 to $20,000 worth of Cardano to become a millionaire. It will take several years to get to this point – McCall says about four to five years – but Cardano is using some interesting tactics to speed this up.

Cardano’s CEO gives his view

Charles Hoskinson is Cardano’s CEO and founder of IOHK. He is also the man who cleaverly named Cardano “the Ethereum killer., even though he was also a co-founder of the Ethereum blockchain project. Hoskinson has pointed out that although Cardano (ADA) and Ethereum(ETH) have a lot in common – both are types of digital currencies that also function as programmable ecosystems, which means other tokens and applications can be built on their networks – they are taking very different routes.

Hoskinson said in a recent interview, “Vitalik’s project Ethereum has done a phenomenal job with what they have built. They’ve built a great community and a great cryptocurrency. I just happen to disagree about business philosophy and you see those disagreements in Cardano. We are following a very different path.”

He also commented on Bitcoin, saying “Bitcoin was worthless in 2009 and then it was worth a lot in 2013.” However, he said, “You can’t do much with it, you can only push the value, you can issue token. However, you can’t do smart contracts, you can’t do anything. Similar to the earliest days of the internet, with the web browser- you could only look at the static pages.”

IOHK/Cardano in Africa

Cardano meanwhile has an impressive pedigree and a long-term vision for its blockchain and cryptocurrency. In particular its work in Africa attracted attention, as covered recently, IOHK’s “Africa strategy” aimed to foster Cardano adoption in Africa for everyday people and businesses. This included goals such as engaging with local stakeholders to deliver projects that solve real issues in the market, as well as to train and educate local developers to create solutions for local problems. For example, with IOHK’s Ethiopian Blockchain Deal, Ethiopian schools will use the Cardano blockchain to track student performance.

At the time, Hoskinson said that Cardano was “at the cusp” of deals and initiatives” through public-private partnerships in certain nations in Africa. Thus making way for “millions of users” to enter the Cardano ecosystem this year. According to him, if the Cardano team is able to achieve these goals, it will enable “a new economy” of over “5 trillion dollars of wealth.” He also said he believed that Africa is not a poor continent, and argued that the only challenge was that “real wealth” was “inaccessible due to bad systems.”

The sentiment is bullish for Cardano

Analyst and trader Benjamin Cowen in a recent video projects ADA’s potential to hit $20, this bull cycle, outperforming Bitcoin. Meanwhile, data from Google Trends depicted that interest in the search term “Buy Cardano” has hit a three-month high.

There is a lot of excitement on Twitter as well. One fan tweeted, “Smart contracts on Cardano only weeks away, who’s excited?!” Certainly its followers are feeling fairly pumped about September for Cardano, and believe it will flip ETH, especially in the NFT market, with one believing Cardano will own the space because of its lower gas fees. Another user called COTI tweeted, “The NFT auction platform which we developed with Cardano is LIVE. We are excited to have a key role in launching NFT auctions with Wolfram Blockchain Labs and Cardano.”

Which brings us back to Nigel Green at deVere: “I’ve been bullish on Cardano for a long time, amongst other cryptocurrencies.  But there’s a now real sense it is about to break out.”

Read this before October 2021 if you’re in crypto!

For those of us who believe in the concept of decentralization that underpins Bitcoin, I believe we are shortly going to receive a shock in the form of new regulations. The wealthiest countries in the world are snapping at the heels of the crypto universe and are looking at ways they can use financial regulations to bring fintechs, exchanges and crypto owners into line.

What do governments want to restrict?

Here’s a list of ‘things’ they are planning to target:

  • Peer-to-peer transactions
  • Stablecoins
  • Private wallets (phone, desktop, cold storage)
  • Privacy (privacy coins, decentralized exchanges, TOR and I2P)
  • Former ICOs & future projects (NFTs, DeFi, smart contracts, second layer solutions and more)

What is their intention?

At it’s most basic, you could say that they want to know EVERYTHING!

They want to:

  • Businesses active in crypto to be licensed and regulated like banks
  • Ensure full transparency for all transactions
  • Have the ability to freeze crypto assets belonging to persons or countries they believe are a ‘risk’
  • Force the disclosure of user information for all transactions
  • Revoke licenses of any that don’t comply with regulations.

They want control of a space that emerged precisely as a reaction to government and bank controls on money, both of which allowed a global financial crash to happen in 2008.

Why do governments suddenly want more regulations?

The answer is fear. Wesley Thysse in his document “Government Planning Worldwide Regulation of Bitcoin”, he points to one event that suddenly made them sit up and take real notice of cryptocurrencies, and that was Facebook’s 2018 announcement that it intended to create and launch a ‘so-called’ stablecoin. As Thysse says, “Until then they didn’t see cryptos as a risk to the global financial system.”

Why did Facebook’s Libra coin, as it was called at the time, send a ripple of unease through wealthy governments? Because Facebook’s billion users would have access to an instant payment system that was faster and more importantly cheaper than anything offered by the existing financial system.

Governments and the central banks huddled together in talks about what to do, and engaged an organization called Financial Action Task Force (FATF). Its goal is “to protect the integrity of the global financial system.” A real Big Brother!

FATF has already passed similar legislation for global governments, and it is the organization behind the rule insisting that all cryptocurrency exchanges that exchange fiat for crypto have the same KYC and anti-money laundering requirements as banks. What they will do now is turn their attention to all the elements of the industry outside this kind of control and as Thysse says, “declare what is, and isn’t acceptable.”

In 2018 FATF set out to control money laundering and terrorist financing, but now it is going much farther, and they are making swift progress. The document anyone in the crypto space should be looking at right now is FATF’s ‘Guidance for a risk-based approach to virtual assets and VASPS’ (GVA). This is due to be implemented in October 2021. Furthermore, it is impossible to move FATF out of its powerful position, because the organization is protected by the Vienna Conference on Diplomatic Intercourse and Immunities, which means they enjoy immunity with regard to their actions and are unburdened by the rules the rest of us must live by.

The so-called public consultation on the GVA was a farce, as they only chose the feedback that suited their agenda. They have delayed the implementation of the GVA until October, but after that expect to see their recommendations being implemented at national level, and in our legal systems. You should also note that the GVA will not apply to central bank-issued digital currencies. So, the agenda is very clear!

It may not be all bad news

As much as those dedicated to crypto may be horrified by all this, let’s take a moment to look at a possible upside: regulations may just pave the way for mass adoption, something the crypto community has long been waiting for. But at what cost? However, I urge you all to read the FATF GVA, because in just a few months it is going to start affecting your life, and most likely it won’t be in the way you would like.

Ethereum will be the smart contract global standard

Benzinga, a fintech company that provides market news and data to retail and crypto traders, published its latest survey earlier in June, titled “Ethereum Predicted to Become the Global Standard Smart Contract Blockchain.”

The firm surveyed data from 100 cryptocurrency investors and traders, and the data collected revealed some very good news for the Ethereum blockchain, because over 50% of those surveyed “believe that Ethereum is poised to become the global standard contract blockchain.”

The survey says, “Out of 100 investors polled, 56.7% said Ethereum, 20.6% said Cardano, 8.2% said the Binance Smart Chain and 14.5% reported other platforms.” That certainly puts Ethereum solidly out in front of its competitors and the so-called ‘Ethereum killers’.

What makes the investors so bullish on Ethereum? They responded, “decentralization, application ecosystem and scalability” play a role in the decision, although they also revealed that ‘scalability’ was the most important factor, and ‘decentralization’ the least important.

The ‘scalability’ factor is interesting, because that refers to processing times and lower gas fees, the latter having been a thorn in Ethereum’s side recently. Scalability has also been a problem for the leading smart contract blockchain, but this does not seem to have deterred these investors from seeing a bright future for it, and a belief that it will overcome the gas fee and scalability issues with Ethereum 2.0, which is on its way. The fact that it is the main blockchain for DeFi projects also plays an important role in infusing investors with confidence in the product, because it has first mover advantage.

However, Benzinga does offer some words of warning for newer retail investors: “Ethereum’s struggle to upgrade from proof of work to proof of stake has been highlighted by high gas fees and harsh criticism from environmentalists. This chink in Ethereum’s armour has been targeted heavily by Cardano and the Binance Smart Chain, and only time will tell if the flaw is fatal. For now, Ethereum is still home to the largest DeFi ecosystem, and layer 2 solutions show promise to scale Ethereum before the ETH 2.0 mainnet goes live.”

On the other hand, the fact that investors remain the most bullish on ETH suggests that traders have faith in the Ethereum Foundation’s ability to successfully complete the 2.0 scaling upgrade. This is not to say that Cardano and Binance Smart Chain will not have an opportunity to claim some of Ethereum’s market share, but if Ethereum is widely seen as the ‘gold standard’ for smart contracts, their work will be so much harder.

Biden puts crypto wallet regs on hold

Finally the inauguration of Joseph R Biden, 46th president of the United States took place on 20th January, and the whole event concluded without so much as a sneeze. He didn’t waste time when he sat down at the Resolute desk for the first time, signing a swathe of executive orders that overturned some of his predecessors more contentious policies, such as leaving the Paris Climate Agreement. As of yesterday the USA is back in, for which many are thankful.

However, there was something else he did that is of great interest to the cryptocurrency community. He put a freeze on FinCEN’s proposed crypto wallet regulations proposed by former Treasury Secretary, Steve Mnuchin, a known ‘hater’ of crypto. These rules would be detrimental to the crypto industry and were already seen as controversial.

Cointelegraph says: “The announcement came in a White House memorandum for the heads of various federal agencies, the Financial Crimes Enforcement Network (FinCEN) included.” As it remarks, the wallet proposal wasn’t specifically mentioned, but it comes under the general edict.

Mnuchin’s seldf-hosted wallet proposal, which alarmed the crypto industry, if passed, “would require that banks and money service businesses submit reports, keep records, and verify the identity of customers who make transactions to and from private cryptocurrency wallets.”

This goes against the basic philosophy of decentralization, and as Jack Dorsey said, “counterparty name and address collection should not be required for cryptocurrency just as it’s not required for cash today.”

Other critics of the proposal also pointed out that anyone using smart contracts, as one example, couldn’t comply with the proposed regulation, because “smart contracts do not contain name or address information.”

Now we must wait and see what Janet Yellen, the new Treasury Secretary will do. She is not known for being a massive fan of crypto, but some industry insiders see her in a positive light. Compound Finance General Council Jake Chervinsky is optimistic, saying: “We fought hard & earned the right to take a breath & reset. Janet Yellen isn’t Steve Mnuchin. I’m optimistic.” He believes that unlike Mnuchin, Yellen will be more open to learning about crypto and listening to its experts when it comes to making decisions about new regulations. Furthermore, as everyone has been pointing out for weeks now, Biden appointed Gary Gensler to head up the Securities and Exchange commission, and he appears to be much more sympathetic to the idea of decentralization than those who went before him.

It’s early days, but it would seem that we are entering a period of compromise, rational thinking and cool heads, and this may just be what the US crypto industry needs to progress.