Cardano and Avalanche have had quite the journey in the last few years. These smart contract-based cryptocurrencies are quite promising in the long run despite their success so far.
Financial markets suffered their biggest fall since 2020, and cryptocurrencies were affected on a larger scale, with billions of dollars worth of market cap outflowing the market.
But for patient investors that look in the long run, some cryptocurrencies can offer excellent returns.
Is the SHIB Hype Still Relevant?
While hype could be the biggest price factor for many cryptocurrencies, the same may not apply to 2022. Let’s take Shiba Inu as an example.
Shiba Inu-themed cryptocurrencies were the biggest winners in 2021. Despite SHIB being one of the most popular cryptocurrencies on the planet, having a historic gain of 46,000,000% last year, the likes of Shiba Inu are not among the digital currencies that may reward investors in the long term.
Although a handful of factors work in favor of meme tokens, such as the number of unique wallet holders surpassing 1.1 million (i.e. SHIB holders) and the holding period drastically increasing, there are multiple red flags that should keep long-term crypto investors aware
For example, no matter how many new users hold SHIB, it hasn’t changed the fact that Shiba Inu lacks a competitive edge or true differentiation. An internal blockchain layer-2 upgrade, known as Shibarium, should help reduce Shiba Inu’s transaction fees, but it’s unlikely to be enough to make SHIB stand out from its other competitors in the top 10 rankings based on market cap. Instead, multiple next-gen blockchain projects can deliver so much more.
Shiba Inu is also not particularly useful outside of cryptocurrency exchanges. Even after hundreds of new businesses accepted SHIB as a form of payment since early October, the total number of businesses accepting SHIB payments is just over 600. By comparison, there are over 500 million entrepreneurs worldwide, and a big portion of that is accepting payment in other cryptocurrencies that have a more serious approach to the market
Moreover, history shows that those kinds of gigantic payouts from cryptocurrencies in a very short period of time are not often the case for projects that have longevity. Those cryptocurrencies that have seen short-term five or six-digit gains have experienced over 90% pullbacks after hitting their respective all-time highs. A reversal of the same magnitude may also occur to other meme coins that do not necessarily have so much utility. Nonetheless, some meme tokens that have powerful missions could still manage to differentiate themselves from the rest and provide unique features. Nonetheless, SHIB still remains one of the best meme tokens ever created, and its story is far from over.
Safer and Worth-Holding Cryptocurrencies
Instead of putting your money in a coin that has been hyped relentlessly on social media and has no real utility, Cardano and Avalanche can prove to be two of the biggest game-changers despite their already-achieved successes.
Avalanche
It’s no secret that Avalanche (AVAX) offers the most intriguing and long-term appeal of any cryptocurrency. That’s because Avalanche offers multiple competitive advantages and true differentiation in a rather tough market
Avalanche is a smart contract-driven blockchain network that offers incredible speed and scalability while giving users the ability to develop decentralized finance services (DeFi) and decentralized applications (dApps).
According to the developers, Avalanche is capable of very fast transactions and can support over 4,500 transactions per second (TPS) on its blockchain. Compared to Bitcoin and Ethereum, which respectively only manage 7 TPS and 14 TPS, AVAX could become one of the biggest cryptocurrencies in the long run.
Besides being faster, cheaper, and more scalable than the two most popular blockchain networks supported by smart contracts, Avalanche is also highly compatible. For example, the Ethereum Virtual Machine (EVM) – the very popular software used to build dApps on the Ethereum blockchain – already runs on the Avalanche blockchain. The implementation of EVM on its blockchain should serve as bait to attract developers to its network.
With so many clear advantages over the likes of Ethereum and real-world utility unlike Shiba Inu, Avalanche could be one of the most promising cryptocurrencies in the market, even though it is already in the top 10 rankings.
Cardano
Cardano (ADA) is another smart contract-based cryptocurrency that could be profitable in the long term.
The transparency of the Cardano development team is probably the greatest asset of this project. The developers have always presented a detailed plan of how they aim to build Cardano from the ground up to become the best choice for dApp developers.
Although some of the planned upgrades did not take effect when originally planned, a number of key improvements have been made to Cardano networks over the past 19 months. For example, the Shelley upgrade went into effect in July 2020. Shelley enabled network participants to run more nodes. After this upgrade, we have seen a rapid scaling of the Cardano network and an increase in transactional activity. What was a network processing 2,000 transactions per day is now a network that regularly sees over 100,000 daily transactions on its blockchain.
Shelley was followed by the Goguen update in September 2021. It was Goguen who introduced smart contracts to the Cardano blockchain. Smart contracts are the secret sauce that allows dApp developers to build decentralized applications on its blockchain.
But the most exciting development for Cardano may well be the Hydra upgrade. What makes Hydra so intriguing is the rapid scaling potential it offers. Once live, Hydra will route transactions from the main blockchain to staking pools, called Hydra Nodes. In theory, up to 1,000 of these nodes will each be able to process 1,000 transactions. Although there is no official timeline for Hydra, its TPS potential could shatter all existing cryptocurrencies and traditional payment processing networks, such as Visa.
To sum up, both Cardano and Avalanche have promising features on the way. The two have efficient ecosystems. Hence, whether you invest in Cardano or Avalanche, it may be profitable in the long run.
Content proposed by our partner Miroir Magazine.
More about the author: Almmaye
Alm Maye has been a trader and analyst since 2013. He is an expert in equity markets, Forex, and cryptocurrencies. He is the creator of Almvest.com and Imveste.com, two sites dedicated to finance. Moreover, he participates in the development of featured articles on various sites such as Actions-boursieres.fr, as well as the international network of Finixio.com.