Cardano’s most anticipated event of the year is upon us as the Alonzo Hard Fork is set to begin tonight. The emergence of smart contracts on the network will be the first step towards a market coup. If all goes well, shock waves will be sent across the entire crypto room.
The question, however, is how much will this affect the Ethereum competitor and how will investors react?
Cardano, Ethereum and the future of smart contracts
With the big upgrade happening tonight, investors and developers alike are excited. However, during the smart contract testnet, users observed some key concurrency issues that sparked skepticism in their hearts, such as: Bitcoin magazine reported.
However, a comparison between Cardano and Ethereum makes it clear why Charles Hoskinson’s darling has strong potential to overtake the second largest cryptocurrency.
An additional advantage for ADA is that the network can already process more transactions per second (currently 250 TPS) compared to Ethereum’s 15 TPS. Not only that, it has lower gas charges too. This will help Cardano grow faster at a time when Ethereum fees averaged $ 4.2.
ETH gas fee | Source: EthereScan
Plus, smart contracts start at the best time because NFT has taken over the market. Revenue is around $ 64 million per day and could most likely lead to Ethereum-based NFTs migrating to the faster and cheaper Cardano network.
Daily OpenSea NFT volume at $ 64M | Source: Dune Analytics
The September 7 crash shocked investors as liquidations hit a 4-month high and open interest (OI) fell to monthly lows. But now that the Alonzo hard fork is so close, investors seem to be getting bullish. Buy orders exceeded expectations and sell orders rose ADA 12 million ($ 29 million) as prices fell near May levels.
Cardano buy orders dominate the market | Source: IntotheBlock
If the price rises after activating Alonzo, addresses that are already 82% profitable can post even more profits.
Cardano Profitable Addresses | Source: IntotheBlock
To achieve this, however, Cardano must maintain a strong correlation with Bitcoin in its current form (0.83). At the same time, ADA should also keep volatility as low as possible, below the current level of 109%.
Cardano and Bitcoin Correlation | Source: IntotheBlock
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According to Ambcrypto