The IOHK company’s project, the Cardano blockchain, has just seen its token, ADA hit a new all-time high of over USD 2 on Coinbase Pro. The coin’s surge comes amid a bearish market after it was revealed that Tesla is suspending its Bitcoin payment option due to energy concerns.
Why the rise in ADA?
The main reason for the recent price hike at ADA is the long-awaited launch of the “Alonzo Testnet”. Cardano is getting fully into the smart contracts space, aiming to compete with the leading cryptocurrency smart contract network, Ethereum. Although the Testnet has not yet started, its ecosystem is growing exponentially with multiple listings, as can be seen in the image below.
READ: Cardano flies at record high amid the purchase of a top American singer
These companies are already listed on Cardano’s smart contract platform and are ready to do business once it opens sometime in May 2021. The Alonzo Testnet promises to fix the shortcomings of the Ethereum network, especially in the area of gas fees (transaction fees). Today, investors are paying gas fees on the Ethereum network through the roof, with investors paying up to $ 700 in gas fees due to the high network congestion. When the Cardano Testnet launches, it won’t be a surprise if investors migrate from the congested Ethereum network to the Cardano blockchain.
READ: Why Ethereum Transaction Fees Are Often Expensive
Another reason for the increase is energy consumption. Due to Tesla’s recent suspension of Bitcoin as a payment method due to its high energy consumption, CEO Elon Musk mentioned that the company will be looking for a cryptocurrency that uses less than 1% of Bitcoin’s energy consumption. The cryptocurrency the electric car company would most likely use in the future might as well be ADA. Recent reports from TRG Datacenters show that ADA consumes 0.5479 kWh per transaction, compared to Bitcoin which consumes 707 kWh per transaction. This makes ADA a likely cryptocurrency choice for Tesla.
With this in mind, ADA appears to be becoming a force in the cryptocurrency world. This assumption is confirmed by the recent partnership that the IOHK company has entered into with the East African country, the Tanzania Ministry of Education. The current return on investment YtD is 750% and it is currently ranked 4th by market capitalization.