Now Cardano (ADA) finally smart contracts has activated, many investors have high expectations. Can these smart contracts cause the ADA price to rise? According to analyst Benjamin Cowen, yes. He looks for this at the network effect that has helped Ethereum up.
In a recent analysis he explains how many people actually use ether for all kinds of things like non-fungible tokens (NFTs) and decentralized applications. This creates demand and thus a rising ETH price. Cowen explains:
“A lot of ETH is gobbled up on all these different platforms, by people who actually use Ether: NFTs, DeFi. There are so many different applications out there right now, so many dApps people are using with Ether, and that probably contributed to the high market cap.”
And Cardano isn’t really experiencing that network effect yet, Cowen says. There are hardly any applications active on Cardano yet, although these are already under development. Building an ecosystem takes time, “but I do think Cardano will grow over time, and I think as more utility is built on the platform, it will have a positive effect on the price,” the analyst said.
Where does Cowen see ADA going? For this he looks at the ADA/ETH trading pair. He still has a long way to go if he wants a new one all time high (ATH) to achieve:
“For ADA to hit a new record against ethereum, it will have to rise… another move of 68% or so. A 68% move by ADA at constant ether price would bring it closer to $4.50. Do I expect ADA to go to $4.50 this month or next month? Probably not, to be quite honest, but I do think we will get there eventually.”
Ultimately, of course, it remains to be seen how and whether the Cardano ecosystem will get off the ground. So yesterday at least the important step was taken with the Alonzo update.