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Quick Take: Cardano's Recent Dip

 I’m relatively new to Crypto, and I haven’t been an active participant in this sphere for too long. Despite that, I have stake in Ethereum, and recently established a position in Cardano. What attracted me to Cardano was the general Cryptocurrency dip that had occurred since the beginning of the summer this year. As I was reading on the subject, I came to discover that there was an update happening soon where smart contracts were going to be enabled to the blockchain. In fact, Charles Hoskinson seemed adamant about releasing the tech on a particular date, September 12th [1].  




Now, from my experience with Ethereum so far, it’s obvious that deadlines are a tricky thing to deal with. Ask Vitalik Buterin how hard it is to keep to an update deadline considering that the move to Ethereum 2.0 has been delayed multiple times since its announcement some time ago [2-5]. So as an investor, I love this sort of situation. It’s a simple thesis:

1. There is now a bet being made for this grand announcement.

2. The bet is on the ability for Charles and Co. to meet their deadline

3. In the meantime, the price of Cardano will rise because people buying into the hype of the update, and people buying to bet for/against Charles’ ability to meet a deadline.

4. If he succeeds, you can cash out from the gains made while waiting for update. If he fails, you can still cash out from the gains from waiting before it crashes.

With this thesis I bought in about a week and a half ago. Pleasant to my surprise, I made a nice penny so far from the hype. Now, it’s September 14th, and I still haven’t sold my stake despite the recent large dip because I’m still above my cost basis by about a $120 total. Truth be told, I was betting against Charles and Co., but the fact that he did it has given me a sense of trust in the ability of the team to manage the development of the blockchain accordingly. Now that the smart contracts update is live as of September 12th, I’m expecting an even higher return over the next 6 months as people begin to explore and play with the new update. For now, people are still cashing in and selling, and many of them probably see the same outcome I do and will buy back in after the trough of the dip has been reached.

The other interesting takeaway from this situation and in Cryptocurrency in general is that there is now budding differentiation in price fluctuation between the popular coins. We’ve seen in the recent Crypto crash that the recovery is splitting in different directions, I see that the trajectory Bitcoin, Cardano, and Ethereum have been on over the past month is not as synchronous as it used to be. This can be a sign that the there’s enough crypto investors now that the differences between coins are going to matter more, it could be more awareness of the differences between coins by big money investors, or it could be an increasing “efficiency” of the Crypto market as a whole.


References

1.    https://markets.businessinsider.com/news/currencies/cardano-alonzo-upgrade-ada-purple-smart-contracts-defi-nft-2021-9
2.    https://decrypt.co/35210/ethereum-2-0-delayed-vitalik-buterin-disagrees
3.    https://www.coindesk.com/tech/2020/05/11/vitalik-buterin-says-much-delayed-ethereum-20-still-on-track-for-july-launch/
4.    https://www.nasdaq.com/articles/ethereums-billionaire-founder-admits-ethereum-2.0-is-delayed-2021-06-07
5.    https://tokenist.com/buterin-explains-why-ethereum-2-0-upgrade-wont-arrive-until-late-2022/


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