Some of the lesser-known cryptocurrencies are racing higher.
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Bitcoin (CRYPTO: BTC) has given back some of its recent gains, falling 2% over the past 24 hours.
One Bitcoin is currently worth US$46,199 (AU$63,286). That gives the world’s largest crypto a market cap of US$863.5 billion.
Ethereum (CRYPTO: ETH) is also slipping, down 3%. One Ether is currently trading for US$3,174.
With a market cap of US$371.7 billion, Ether retains its spot as the world’s second biggest crypto by market value.
About 80% of the top 100 cryptos listed by CoinMarketCap are following Bitcoin and Ether lower today.
According to Marcus Sotiriou, a trader at digital-asset broker GlobalBlock (quoted by CoinDesk), that’s because, “Even though the trend has flipped bullish, a pullback is to be expected before continuation. This is because there has been declining volume with an increase in price.”
New cryptos are rising fast
While Ether is still solidly in second place with its market value of US$371.7 billion, the number 3 spot is being hotly contested by the previously virtually unknown Cardano (CRYTPO: ADA).
In fact, last night Cardano overtook Binance Coin (CRYPTO: BNB) as the world’s third largest crypto.
It’s since slipped back into fourth spot, with the price falling 1.1% over the past 24 hours, while Binance Coin gained 1.9%.
But it remains a tight race.
At the current price of US$2.12, Cardano has a market value of US$67.4 billion, compared to US$71.0 billion for Binance Coin.
With Cardano having gained some 1,400% over the past 12 months, that’s not much of a margin to breach.
In fact, if Cardano gains as much over the next 12 months – and the Bitcoin price remains flat – it would overtake Bitcoin as the world’s largest crypto by market value.
What is Cardano and why is it rallying faster than Bitcoin?
You may not have heard of Cardano.
I hadn’t myself until I penned an article on its meteoric rise yesterday. (You can read that here.)
My computer’s spell check doesn’t get it yet either.
It accepts Bitcoin as a word. And Ether.
But I have to tell the program that Cardano isn’t a typo.
That won’t come as a surprise to Antoni Trenchev, managing partner at crypto lender Nexo.
Comparing Cardano’s market value to companies listed on the S&P 500 (INDEXSP: .INX), Trenchev said (quoted by Bloomberg), “Most people outside crypto have never even heard of Cardano – yet here it is with a market cap” in excess of many S&P 500 companies.
The Cardano aficionados have been awaiting – some impatiently – for what seems like an eternity for some news on smart contracts. Cardano is tussling with number 2 crypto Ethereum to be the preeminent blockchain offering smart contracts.
Cardano aims to have its smart contracts rolled out by September, potentially taking a bite out of Ethereum’s decentralised finance (DeFi) services. As the name implies, DeFi takes traditional banks out of the picture, letting people lend, borrow or save money on digital ledgers.
According to CoinMarketCap, Cardona plans to allow “decentralized apps and smart contracts to be developed with modularity”.
Cardano is used by agricultural companies to track fresh produce from field to fork, while other products built on the platform allow educational credentials to be stored in a tamper-proof way, and retailers to clamp down on counterfeit goods.
Still, you don’t have to look far to find sceptics.
Like Galaxy Digital’s CEO Mike Novogratz. In a Twitter post, Novogratz wrote, “I spoke to twenty of the smartest people I know in the space, and zero of them saw Cardano having traction.”
Before investing in Bitcoin or Cardano
As always, we leave off with the advice that if you are considering investing in Bitcoin, Ether, Cardano, or any other cryptocurrency, only invest what you can afford to lose.
Cryptos can, and have, fallen in value even faster than they’ve gained.
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Should you invest $1,000 in Cardano right now?
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The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Bitcoin and Ethereum. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.