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‘Cardano (ADA) value per user much lower than Ethereum (ETH),’ is ADA undervalued?

‘Cardano (ADA) value per user much lower than Ethereum (ETH),’ is ADA undervalued?

The world’s largest digital fund manager Grayscale recently launched a report on Cardano (ADA) published. In it, it compares the altcoin with Ethereum (ETH) and states, among other things, that the value per user on Cardano is lower than Ethereum. But does this also mean that ADA is undervalued at the moment?

In the report, which is titled “An Introduction to Cardano”, the asset manager presents several statistics. Cardano has 2.8 million monthly active users and Ethereum 7 million, according to Grayscale. This while the market capitalization of the two shows a much larger difference. As a result, the value per user is lower in the case of Cardano:

“On a relative basis, although the number of Cardano users is lower than that of Ethereum, the average values ​​of the two networks per monthly active user (market cap per active address) moved together, but recently we are seeing a discrepancy. The value of Ethereum per user is ~$55,000 while Cardano’s is ~$30,000. This could mean that Cardano is valued lower compared to the largest comparable crypto network, Ethereum, based on this particular metric.”

Yet it is not so easy to say that the current cardano price is too low. Grayscale mentions a number of risks associated with an investment in the altcoin. For example, there is a lot of competition among smart contract networks such as Ethereum, Solana (SOL), Avalanche (AVAX) and more. In addition, an active decentralized application (dApp) ecosystem on Cardano.

While on Ethereum we find thousands of applications with a very vivid decentralized finance (DeFi) ecosystem, this is not the case on Cardano. Of course, Cardano is still under development and its smart contract has only recently been activated. Yet Cardano and Ethereum are therefore not really comparable at the moment. Grayscale concludes:

“Cardano has managed to acquire a large decentralized user base, leading to rapid network growth. If Cardano can deliver on its technology vision, the network can see greater utility, adoption, use and growth.”

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