London – 21/06/2022

The Cardano – Bitcoin case

• Founded: Cardano was launched in 2017 by Charles Hoskinson (also co-founder of Ethereum) while Bitcoin in 2009 by an anonymous developer or group of developers with the name Satoshi Nakamoto.
• Consensus Algorithm: Cardano is one of the best Proof of Stake (PoS) networks, while BTC is the biggest crypto that uses a Proof of Work mechanism. Cardano’s PoS consensus algorithm called Ouroboros and is an environmentally sustainable, verifiably secure protocol with rigorous security guarantees. The importance of PoS is that it uses less computing power and therefore less electricity, unlike Bitcoin which consumes a huge amount of electricity for mining (~126Twh annualized consumption, source: Cambridge Bitcoin Electricity Consumption Index).
• For Trading: Bitcoin as the oldest and most established crypto takes the lead as it has high trading volume, is traded on almost every exchange, and is used mainly in payments and other fintech services. On the other hand, Cardano’s advantages stand out in that it uses smart contracts, has quick transaction speed, and is a 3rd generation crypto project as it tackles the scalability, interoperability, and sustainability problems.

• Sentiment: Based on advanced a-Quant Machine Learning and Natural Language Processing algos & data, BTC has a Positive Sentiment returning from Negative, and ADA a Positive returning from Very Negative. a-Quant Sentiment is referred to the next 2 months.
• Macro: The negative macroeconomic environment combined with the high inflation and the projected interest rate increase created a sell-off environment for most cryptos. From the end of March until now, BTC is -55% while ADA is -63%. Investors tend to rebalance their portfolios from high-risk to low-risk assets. Even though cryptos still provide high-risk exposure, we estimate that investors who want to have this exposure will move from small-cap cryptocurrencies to large-cap cryptos such as BTC and ADA.

• Dominant players and traction: The digital assets mega fund Grayscale recently increased Cardano’s weight in its digital large-cap fund. In 2022, Cardano achieves a strong increase in the number of wallets and the daily active addresses compared to 2021 (Source: Cardano Blockchain Insights). BTC attracts a variety of significant players from crypto hedge funds to fintech firms.
• News: In the last few weeks (in June) several whale transactions were recorded (Source: Santiment) as a result of the upcoming launch of the Vasil hard fork in the Cardano network. The Vasil hard fork will improve the performance and capability of the network. Investors should pay attention to 29/06/2022. Also, the Bitcoin hash rate recently reached an all-time high (231.428 EH/s).
• Price Projection: In 2022, we have observed a downturn in cryptos mainly due to macroeconomic conditions. In June, ADA outperformed BTC, and based on our prop machine learning algorithms and major upcoming events, we estimate that ADA will continue to outperform BTC and thus our projected price with 71.6% probability indicates that ADA-BTC will be at 0.00002838 in a few weeks (from 0.00002384) resulting to a +19.04% increase from the current levels. Our second projected price with 62.3% probability shows that ADA-BTC will be at 0.00004129 (+73.19% increase) in the next few months.