Looking for a new crypto opportunity? Buy this one

At first, the Federal Reserve classified the rise in inflation as temporary. But now that it is obvious that the central bank made a terrible mistake, interest rates are rising rapidly. And this scares investors, especially those in cryptocurrencies.

The total market for digital assets has lost more than half of its value this year, while S&P 500 is down 21% in 2022. But for astute investors who can look past the near-term uncertainty, there are still some opportunities to be had.

If you are looking for a new cryptocurrency buy, take a closer look at Cardano (ADA -1.00%).

A promising blockchain

Cardano was launched in September 2017 by the former Ethereum (ETH -1.18%) co-founder Charles Hoskinson, with the goal of improving some of Ethereum’s weaknesses around scalability. Cardano has given a superb return of 1570% during its history. But thanks to the bear market we’ve seen in 2022, it now has a market cap of $14.5 billion, making it the eighth most valuable cryptocurrency in the world. And at the time of writing, there were 34.99 billion ADA, Cardano’s native token, in circulation, with a unit price of around $0.42.

What makes Cardano unique is its incremental development approach. New updates are peer-reviewed by computer scientists and researchers from top universities around the world. Although this system means longer wait times for the introduction of new features, it helps ensure that all potential bugs are considered.

The latest update, called the Vasil hard fork, went live on September 22. This was intended to increase Cardano’s scalability. The hope is that the Vasil hard fork will attract much more developer activity to the platform, especially for the growth of decentralized financial services.

Another exciting feature of Cardano is Hydra, a Layer 2 solution built on top of Cardano’s main blockchain. Hydra’s goal is to dramatically increase throughput to 1 million transactions per second (TPS) with the addition of sidechains that run parallel to the main blockchain. For the sake of comparison, Ethereum is processing less than 15 TPS right now.

In my opinion, the more real utility a cryptocurrency can provide, the better the odds for its ultimate success and viability. That’s because with more users entering the ecosystem, the demand for and ultimately the price of ADA should rise. And in terms of use cases, Cardano makes inroads into a variety of applications, such as identity verification in the financial industry and supply chain tracking in the agricultural sector.

With the further development of the network, Cardano expects to continue to build utility. In fact, more than 1,000 different decentralized applications are running on the network today. It’s not at Ethereum’s level, but it’s still impressive.

Focus on the long term

As I mentioned earlier, rising interest rates, a trend that is unlikely to end anytime soon, is leading some market experts to predict that a recession is on the horizon in the United States. Therefore, crypto investors should temper their expectations in the face of increased macroeconomic uncertainty. Things can get worse before they get better, and it’s best to be prepared for volatility.

Nonetheless, it’s refreshing to see that Cardano doesn’t rely on – and in fact avoids – trying to make splashy headlines to quickly boost the price of its token. Thousands of cryptocurrencies already do. Instead, a deliberate and thoughtful approach can only help ensure Cardano’s long-term survival.

It would be a mistake to hope for the same monster returns from Cardano as a top cryptocurrency that Ethereum was able to produce. Cardano is focused on the next decade, not the next month, and owners should internalize this mentality as well.

For investors looking to find the next potentially lucrative buying opportunity, Cardano, which is down 68% in 2022, looks like a worthy candidate.