It’s called ADA, and it is the native token of the Cardano blockchain (a similar technology to Bitcoin, where all transactions are recorded on a single ledger).
Much like other cryptocurrencies, any user anywhere in the world can use ADA as a secure exchange of value.
It’s currently priced at $1.39 per token – but if you jumped onboard in 2020 you could have bought ADA for just 20 cents per token.
According to trading multi-brokerage company eToro, ADA has seen a 157 per cent increase in trading in the past month, hitting a high of $1.45 on the last weekend of February.
Simon Peters, eToro’s resident cryptocurrency expert, said clued-in investors were searching for alternatives to Bitcoin that would allow them to get in on the ground floor of the next big boom.
“The market is evolving. Rather than focus solely on bitcoin and ethereum, where many investors can only own a fraction of one coin, we are seeing increasing demand for coins priced like bitcoin and ethereum were a few years ago,” Mr Peters said.
“Investors are looking for the next bitcoin, meaning they’re investing in cheaper tokens like Cardano’s ADA, IOTA and Tron, all of which are priced around the $1 mark.
“We believe this year could see this hunt for the next ‘bitcoin’ intensify, as the market widens and other coins gain their own following.”
Mr Peters said the overall trend in cryptocurrency was that of acceptance; the more large companies that allow trading with Bitcoin, the more legitimate it becomes.
“February was another busy month for bitcoin and ethereum. Both have seen prices rocket since the start of the year, but while there was volatility, the wider adoption story continues to power both cryptoassets,” Mr Peters said.
“With more and more real-world cases of crypto adoption it remains a question of when, and not if, these assets will become more widely used in our everyday lives.
“We expect volatility to continue, as with all emerging assets, as crypto’s journey is still very much at the beginning.”
There are a number of reasons why Bitcoin is booming, but all of them circle back to one reason: legitimacy.
Once seen as the domain of cybercriminals and software engineers, Bitcoin is gaining legitimacy as an alternative currency that is not tied to any one nation state or government.
Earlier this year Mr Musk’s auto company Tesla announced it would soon accept Bitcoin as payment for its cars, effectively legitimising the currency as a valid form of trade.
“Tesla … has de-risked the acquisition of #bitcoin by public companies and accelerated the digital transformation of corporate balance sheets,” MicroStrategy CEO Michael Saylor, a Bitcoin advocate, tweeted.
“Treasurers are now thinking about how to convert a non-performing asset into the best performing asset.”
There are a number of other reasons why Bitcoin is gaining ground among institutional investors.
Bitcoin has inbuilt scarcity of just 21 million coins, meaning once all the coins are “mined” they will simply continue to go up in value (if they are used, theoretically).
Much of it is about risk: Bitcoin is infamous for its volatility.
If a business accepts Bitcoin as a payment, there is a very real possibility that the same payment could be worth a dramatically different amount even weeks later.
Explained: What is Bitcoin?
1. Bitcoin is a form of online cryptocurrency that allows money to be transferred electronically. It’s decentralised, which means no-one regulates or controls it except for market demand.
2. It was created by a group (or a single person) of programmers under the pseudonym “Satoshi Nakamoto” in 2009.
3. Bitcoins are “mined” by computers that solve incredibly complex mathematical equations. Like coal or oil, there is a limited number of Bitcoins available to be mined, estimated to be in the ballpark of 21 million.
4. You cannot mine Bitcoin on your home computer, it requires specialised programs and hardware that have increased the difficulty of mining a Bitcoin.
5. Bitcoin experienced a dramatic explosion in value in late 2017, before it experienced one of the most catastrophic value crashes ever seen in currency.
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