Cardano faces stagnant growth with $7.2B in daily transactions but struggles to attract users.
40% of ADA held by long-term holders signals a strong belief in Cardano’s future value.
Solana and Base pose challenges to Cardano’s user growth amid rising competition.
Cardano is struggling to attract new users as it faces increasing competition from emerging platforms like Solana and Base. Data from IntoTheBlock reveals that the number of Cardano addresses holding a balance has plateaued at around 4.45 million for over a year, indicating a stagnant user base. This raises questions about what might be the spark needed to trigger the next growth cycle for Cardano’s native token, $ADA.
Cardano’s number of addresses with a balance has hovered around 4.45 million for over a year. Here's what's going on👇During the last cycle, Cardano experienced significant growth, positioned as a strong alternative to Ethereum. However, in the current cycle, the network faces… pic.twitter.com/WJrnAP8FQZ
— IntoTheBlock (@intotheblock) August 13, 2024
Despite volatile price swings that peaked in early 2021 and subsequent declines, the number of active Cardano addresses has steadily increased, particularly since mid-2021. This growth in addresses, even as prices fluctuated, suggests that while short-term traders may react to immediate market conditions, a core group of users remains confident in Cardano’s long-term potential.
Source: IntoTheBlock
Cardano was once considered a strong competitor to Ethereum due to its growth in the previous cycle. However, recent trends show a shift in user attention towards newer platforms like Solana and Base, making it harder for Cardano to attract new users.
Despite these challenges, Cardano’s network activity remains robust. The platform continues to process roughly $7.2 billion in on-chain transactions daily, a testament to its utility and scalability. This high transaction volume contributes to a notably low Network Value to Transactions (NVT) ratio of 2.62, suggesting ADA might be undervalued relative to its actual usage.
Moreover, both transaction count and the number of active users have remained stable since April, further evidence of a dedicated community actively using the network.
A key indicator of confidence in Cardano’s long-term value is the percentage of ADA held by long-term holders. An impressive 40% of ADA’s supply is held by these “hodlers,” signaling a strong belief in the cryptocurrency’s future prospects.
At the time of writing, Cardano’s price was $0.335243, up 0.45% over the past 24 hours. Cardano currently holds the 10th position on CoinMarketCap, with a live market cap of approximately $12.05 billion and a circulating supply of 35.93 billion ADA coins.
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