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The Cardano price hit an all-time high yesterday (Thursday) even as almost all other cryptocurrencies were tanking.
Blame Elon Musk.
The CEO of Tesla Inc. (NASDAQ: TSLA) made another of his market-moving Tweets late Wednesday. And it caused both events.
Tesla & Bitcoin pic.twitter.com/YSswJmVZhP
— Elon Musk (@elonmusk) May 12, 2021
Musk announced that Tesla has (for now) halted taking Bitcoin (BTC) as payment for vehicles. He said the maker of electric cars was concerned about the rising amount of fossil fuel-generated electricity used by the miners who maintain and secure the Bitcoin network.
"Cryptocurrency is a good idea on many levels and we believe it has a promising future, but this cannot come at great cost to the environment," Musk said in his tweeted statement.
Although Musk also noted that Tesla would not be selling any of the Bitcoin it held on its balance sheet, the cryptocurrency markets saw the tweet as bad news.
Bitcoin plummeted nearly $9,700 in the two hours following Musk's tweet - a drop of about 17%. Most other cryptocurrencies, as they usually do, fell along with Bitcoin.
But not Cardano (ADA) - after a brief drop, it reversed course and started powering toward an all-time high.
Why the Cardano Price Hit a Record High
Although Musk did not mention Cardano in his tweet, he did drop an intriguing hint that immediately sent crypto Twitter sleuthing.
"We are also looking at other cryptocurrencies that use <1% of Bitcoin's energy/transaction," Musk said.
It didn't take long for people to guess that Cardano could very well be at the top of Tesla's list.
Just a few weeks ago, Cardano founder and CEO Charles Hoskinson told Forbes that his cryptocurrency "is 1.6 million times more energy efficient at the moment than Bitcoin."
The Cardano Foundation seized its chance the next morning by tweeting an image comparing Cardano and Tesla with the message, "An obvious match?"
Cardano x Tesla: An obvious match? 🤔
A thread 🧵...#Cardano #CardanoCommunity #Blockchain pic.twitter.com/zJAlDV3muw
— Cardano Foundation (@CardanoStiftung) May 13, 2021
A few hours later, Hoskinson himself tweeted this at Musk: "@elonmusk are we finally going to have the Cardano conversation? Come to my farm in Longmont with Kimbal [Elon's brother]. Got sweet tea and minidonkeys."
With the hive mind of the crypto universe now focused on Cardano as the most likely winner in the Tesla sweepstakes, the price of ADA pushed toward an all-time high of just under $2 per coin.
This latest move capped off an impressive 2021 for Cardano. In mid-April, the Cardano price touched $1.50, good for a year-to-date gain of more than 700%. At just under $2, ADA is up nearly 1,000% since Jan. 1.
While this recent accidental attention is obviously good for Cardano, it's also healthy for crypto in general.
The last few months have seen prices pumping on a series of "meme" cryptocurrencies that had little to no practical use, such as Dogecoin, Shiba Inu, and SafeMoon.
Cardano, by contrast, is a project worthy of being in the spotlight - at least as deserving as the dominant Bitcoin and Ethereum.
This project is so solid it should be good for even bigger gains before the year is over.
A Cardano Price Prediction of $5 for 2021
Unlike many of the current "flavor of the month" cryptos that have enjoyed a lot of Twitter attention and skyrocketing prices, Cardano is a project started in 2015 as a serious attempt to create a "third generation" cryptocurrency.
Hoskinson, who also helped create Ethereum, assembled a team of some of the best crypto developers in the world. They aimed to design a cryptocurrency that would address the kinds of issues that have plagued other projects, such as scalability, security, and interoperability.
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Cardano is built in a modular way to make future upgrades easier, and unlike just about any other crypto project, the code is peer-reviewed. The team has published nearly 80 research papers.
What all of this means to investors is that Cardano is a very high-quality cryptocurrency - a "blue chip," to borrow a term form the world of stocks.
It hasn't gotten as much attention as it should have up until now because it has been slow to introduce such features as smart contracts - a result of the painstaking development process.
But this year the pieces are falling into place.
Before the end of 2021, Cardano will issue upgrades that turn on smart contracts and enhanced governance components. That will make Cardano an inviting alternative to Ethereum for such hot tickets as DeFi and NFTs - the very things that have sent the price of Ethereum skyrocketing.
That's why a lot of crypto analysts are calling for the Cardano price to hit $5 before the end of the year.
Look at it this way. Cardano has a market cap of about $61 billion, less than 15% of Ethereum's market cap of about $426 billion. At $5, the Cardano market cap would be about $160 billion - still just 37.5% of Ethereum's.
Given the massive catalysts that will be driving Cardano later this year, such a leap in price is not at all farfetched. Frankly, the Cardano price could go even higher - possibly as high as $10 - either this year or in 2022.
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About the Author
David Zeiler, Associate Editor for Money Morning at Money Map Press, has been a journalist for more than 35 years, including 18 spent at The Baltimore Sun. He has worked as a writer, editor, and page designer at different times in his career. He's interviewed a number of well-known personalities - ranging from punk rock icon Joey Ramone to Apple Inc. co-founder Steve Wozniak.
Over the course of his journalistic career, Dave has covered many diverse subjects. Since arriving at Money Morning in 2011, he has focused primarily on technology. He's an expert on both Apple and cryptocurrencies. He started writing about Apple for The Sun in the mid-1990s, and had an Apple blog on The Sun's web site from 2007-2009. Dave's been writing about Bitcoin since 2011 - long before most people had even heard of it. He even mined it for a short time.
Dave has a BA in English and Mass Communications from Loyola University Maryland.