Last week, cryptocurrency users watched the market decline severely after Elon Musk announced that Tesla has shut down Bitcoin payments in the meantime, until “mining transitions to more sustainable energy.”
With Bitcoin losing billions over Musk’s announcement in minutes, it is clear that there is a major gap in the market that needs to be filled. As Musk begins his search for a new cryptocurrency, one that uses less than 1% of Bitcoin’s energy, many project developers are presenting their assets as a fitting candidate.
However, during the recent bloodbath, while many altcoins were recording major losses, Cardano (ADA) was moving in the opposite direction as prices hit a new all-time high of over $2 while the other leading cryptocurrencies saw significant losses.
Not long after hitting that price mark, Cardano bulls went crazier as trading volume pumped the asset to $2.13, with over 14% in daily gains and nearly 33% in weekly gains.
Keep in mind that many other assets in the top ten categories in terms of market value have only begun correcting losses at a much slower pace. So why is Cardano taking over so quickly?
All fingers point to the “green energy” rally started by the Cardano Foundation and its supporters who believe it is the best candidate to replace Bitcoin at Tesla.
Is it Cardano’s time to shine?
If Cardano (ADA) is accepted at Tesla, many things could change for the asset, all of which will affect Cardano’s price positively. Cardano (ADA) is currently the 4th most valued cryptocurrency by market valuation, but the asset could very easily knock out its rivals to compete with BNB and Ether if a mainstream company like Tesla makes it a flagship energy-friendly cryptocurrency. But the bigger question is, how energy friendly is Cardano?
Cardano’s proponents are presenting factors like proof of stake, which is the opposite of Proof of work, the algorithm that Bitcoin runs on, as one of the reasons why the network is fit for Musk’s energy goal, as POS reduces the environmental impact that Musk worries about. While Bitcoin uses over 115 terawatts hours, Cardano’s founder Charles Hoskinson claims that the network uses 6 gigawatts hours of energy every year.
The running of nodes on the network is affordable and accessible and is also in line with the UN sustainability goals. Team members and developers can tap from the $1 million funding available in different rounds, making the network one of the biggest decentralized funding platforms in the world.
Are the downsides of Cardano enough to reduce its chances of getting to Tesla?
Although all the above is true, Cardano’s extreme volatility levels might be a cause for alarm. Due to regulatory concerns, Cardano lost 90% of its market value in less than two months. While this was back in 2018, the continuous involvement with regulatory bodies makes Cardano one of the high-risk assets in the cryptocurrency market. For institutions, this is already a red flag, especially considering the current legal situation with Ripple and the effects it has had on XRP’s market value.
However, as we’ve seen before, Musk shows himself as an unconventional thinker. Should he weigh the upsides and downsides and spot potential in the network, especially one that meets his energy and environmental requirements, Cardano just might be on its way to the moon.