Cardano is undervalued according to Grayscale

The Grayscale company, which deals with the management of digital assets, attributes the slow progress of Cardano to the constant desire of the company to get it right

Grayscale Investments released a report on Sunday suggesting that Cardano may be undervalued compared to the other crypto coins Bitcoin and Ethereum. The report argues that given the growth that Cardano has seen in terms of its fundamentals, its value may be higher than where the market currently places it.

The report entitled “An Introduction to Cardano” (An Introduction to Cardano) informs that the actual value of Cardano is about $30,000 and that of Ethereum is about $55,000. Based on his reasoning, Cardano is currently about 45% cheaper than Ethereum, and Grayscale said it is becoming the home of decentralized financial projects (DeFi) due to its new smart contract functionality.

However, the report says Cardano’s insistence on getting it right the first time has slowed his progress as the project places great emphasis on academic research and peer reviews.

“The tradeoff of the Cardano approach has also led to its biggest weaknesses, which include: a historic lack of smart contract capabilities, an unproven track record of how well dApps will work, a still-maturing third-party developer ecosystem, a lack of widespread mainnet dApps, and lower transaction fees.”the report says.

Despite this, Cardano has become the third largest cryptocurrency by market capitalization, with the network processing $1.6 trillion in on-chain transaction value in the year prior to the launch of the main network version of Cardano’s core POS protocol. In addition, the progressive adoption of smart contracts on the platform is one of the reasons why Cardano has seen massive growth in 2021.

“Although large-scale DApp rollouts may take some time, smart contracts are now being tested on the Cardano mainnet, and an early ecosystem of projects is emerging in various use cases.”

Cardano, often referred to as the Ethereum killer, has seen significant growth and adoption over the last year. The coin started 2021 at $0.18 and rose in the top to $3.10 before falling to about $2.20 with the crash of the crypto market. The number of active monthly users of Cardano has increased sevenfold this year to about 2.8 million.

Grayscale Research analysts believe that Cardano is on track to become the most dominant altcoin by market capitalization, although they also see that ADA has a much higher level of volatility compared to Bitcoin and other altcoins.

Grayscale has bet on its belief in ADA’s potential growth, though not as strongly as ETH and BTC. In the asset manager’s portfolio, Cardano is the third largest component of the Digital Large Cap Fund, even though it represents only 5.1% of the $495 million fund. In comparison, Bitcoin and Ethereum account for 62% and 26%, respectively.

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