ADA Vs BTC: Which One Should Be In Your Portfolio?

Cardano and Bitcoin may already be in your investment watchlist. But which one has the better investment in 2021 and beyond?

This guide comparing the cryptocurrencies will highlight all the critical differences between Bitcoin vs Cardano and to find out if Bitcoin or Cardano are worth investing in and which out of the two is the best investment for you.

The first few weeks of 2021 have already seen several record-breaking bull runs as cryptocurrency prices surge to new highs. Following the economic uncertainty of 2020, many traditional investors have also re-evaluated their standing on digital currency and it seems the market has entered a new era of almost universal growth. 

Naturally, this has spurred many market observers to start adding cryptocurrency to their existing portfolios, but whilst some may play it safe and opt to buy Bitcoin - by far the largest token on the market - others look to altcoins for more growth potential. One such altcoin is Cardano, which has been tipped as a new evolution in digital currency.

So when comparing Bitcoin vs Cardano, which is the better option for investors? In the following comparison, we’ll take a closer look at each coin’s strengths and weaknesses and consider their potential for the year ahead. 

Cardano vs Bitcoin - The Key Differences

Comparing Cardano vs Bitcoin is, in a sense, a futile undertaking as the cryptocurrencies are so very different, both in objective and function. However, for those looking to invest in Bitcoin or buy Cardano in 2021, there are a few points that are worth noting. 

Background

Even those with little to no understanding of the crypto market are likely to have heard of Bitcoin. Created in 2009, it is without a doubt the most famous digital currency in existence and also by far the biggest in terms of market capitalisation. 

Bitcoin was originally outlined by Satoshi Nakamoto as a new kind of payments system - one that could operate peer-to-peer and remove the need for a central authority, such as a bank or government. Naturally, this made big waves in the world of traditional finance and to say that opinions were initially split would be something of an understatement.

However, it seems those who chose to invest in Bitcoin have had the last laugh, as its price per token has grown exponentially over the last decade and at the time of writing had hit a new record price of over $50,000 for a single unit of BTC.

Cardano was one of the second-generation cryptocurrencies, which offered enhanced functionality than existing blockchains - including that of Bitcoin. It was developed by Ethereum co-founder Charles Hoskinson and, to date, is the only peer-reviewed cryptocurrency, having been scrutinised by leading academics during its development. 

Cardano’s unique, two-layer network architecture is much more than a digital payment system. One layer allows the exchange of assets via smart contracts and all the development of distributed apps, whilst the other layer supports the cryptocurrency ADA - the native token of Cardano. 

On paper this is all very impressive, but when comparing Cardano vs Bitcoin, the former still has a fair way to go before rivalling its predecessor. Those looking to invest in Cardano are effectively betting on its potential being realised in future.

Transactions and Speed

There are numerous technical differences between Bitcoin and Cardano, but one of the most significant is the way in which transactions are processed. 

Despite its enduring popularity, those looking to invest in Bitcoin should be advised that there has been much criticism of its block creation protocol, which is slower and more costly than that of some rival coins. 

Bitcoin blocks are created through a process known as mining, wherein powerful computers on the network compete to solve complex equations and create new blocks. This process is effectively the lifeblood of the Bitcoin blockchain and miners are rewarded with BTC when they successfully verify blocks onto the network. 

It is this process that keeps Bitcoin secure and prevents ‘double spend’ of Bitcoin, i.e. the same token used more than once. For more information on block creation, see our explanation of crypto mining. 

The problem with this protocol, known as ‘proof of work’ is that it takes time for blocks to be created. It can take up to ten minutes for a new block to be added to the network. By comparison, newer cryptos, such as Ethereum, can produce new blocks in under 20 seconds. 

When looking at the transaction speed of Cardano vs Bitcoin there really is no competition. Cardano can handle at least 257 transactions per second - compared to Bitcoin’s 5 TPS. This is already fairly impressive, but a recent scaling solution known as Hydra 2 promises to boost Cardano’s processing time even further - with  Charles Hoskinson claiming the network will eventually be capable of processing over one million transactions per second. 

This is certainly positive news for anyone looking to invest in Cardano, but it should be remembered that Bitcoin’s comparatively slow transaction time has not hurt its price potential - it is still the most valuable cryptocurrency by a considerable margin.

Supply and Demand

There are plenty of people looking to buy Bitcoin in 2021, but how is supply controlled to prevent devaluation? The answer is twofold. Firstly, the total supply of Bitcoin is hard-capped at 21 million - there will never be more coins than this in circulation.

In addition, the reward handed out to successful Bitcoin miners is halved for every 210,000 blocks that are created. This process is known, unsurprisingly, as halving. The original reward was at 50 BTC. In 2013, it was cut to 25, in 2018 it was 12.5, and in May of 2020, it was halved to 6.25. The next halving should take place some time in 2024.

This gives BTC an in-built deflation and means that BTC will increase in scarcity - and hopefully value - as demand grows but the supply decreases.

Anyone thinking to invest in Cardano should bear in mind that the cryptocurrency was set up with different intentions than Bitcoin. As such, there is more focus on building the network’s utility for smart contracts and Dapps. 

However, as with Bitcoin, the Cardano blockchain also has an in-built deflationary mechanism. The total supply of ADA is capped at 45,000,000,000 and the award given out as part of its ‘proof of stake’ mechanism reduces at varying intervals. This adds an increasing level of scarcity which, traditionally, can drive up the price of an asset over time. 

Despite not being listed on some of the top exchange platforms, including Coinbase, demand for Cardano remains high and ADA has recently shown 24-hour trading volume of $5,878,633,346. Once again, it cannot rival Bitcoin in this area, but the demand is certainly there. 

Cardano vs Bitcoin: Which Is The Better Investment?

If you’re weighing up Cardano vs Bitcoin as to which is the better investment opportunity, then there are several factors that you need to consider.

Firstly, most cryptocurrency forecasts are modelled on previous price movements, so its important to take a retrospective look at any bull or bear runs a token has experienced to try and ascertain what may have triggered them.

Of course, technical analysis requires a great deal of industry and trading knowledge, so the best option for novice investors is to reference the price forecasts of some leading platforms.

Finally, expert opinions can sometimes shed light on what we can expect from cryptocurrencies in the near future.

Cardano Vs Bitcoin - Key Differences

Bitcoin Vs Cardano: Price History

Whether you choose to invest in Bitcoin or buy Cardano in 2021, you are inevitably exposing yourself to risk as the cryptocurrency market is notoriously volatile. However, a look back at each token’s previous price movement can help investors manage their expectations. 

BTC

Bitcoin has seen remarkable price growth over the last few years. Having traded at pennies after its initial launch, not even matching the US dollar until 2011. However, once it was out of the blocks, the price of BTC continued to soar.

When the price of BTC hit $1,242 in 2013, the wider financial sector begun to take notice and there was an ensuing rush to invest in Bitcoin as digital currency came to be seen as a huge opportunity for investors willing to take on a little risk. This continued to drive up prices, until Bitcoin hit a record $19,783.06 in 2017. 

BTC continued to trade at impressively high prices. The coin experienced a bull run throughout the first few weeks of 2021, then in February, Bitcoin rallied again and hit an all-time-high of $51,000, as investors rushed to get in on the bull market.

Cardano

Looking at the price history of Bitcoin vs Cardano, it’s fair to say that the latter does not put up the impressively high prices that BTC does. However, as any investor knows, returns are measured in percentage and ADA’s comparatively low price means its possible to get a much larger holding without sky high entry costs. 

ADA has had a slightly more unusual price trajectory than many other cryptocurrencies. The token reached parity with the US dollar just a few months after it was listed on international exchanges and reached its highest price of $1.18 in January 2018. However, prices then dropped to below $0.10 and remained that way for most of the next two years. 

2020 then saw a change in fortune for Cardano, as the coin finally broke its $0.10 barrier and slowly started to creep up. By the start of 2021, ADA had benefited from the good fortune affecting most of the crypto market and prices had reached $0.92, offering investors a return of almost 500% over 2020.

Bitcoin Vs Cardano: Future Predictions

If you’re planning to invest in cryptocurrency in 2021, then you should bear in mind that the market is famously hard to predict and even forecasts from leading analytical platforms are often revised several times from one week to another. However, for comparing Bitcoin vs Cardano they offer another useful reference, if approached with caution. 

BTC

Even before BTC’s impressive price surge throughout February, most industry voices were unanimously predicting significant growth.

One of the more optimistic predictions comes from DigitalCoinPrice. The platform’s technical analysis suggests BTC will continue to grow throughout 2021, potentially reaching an unprecedented $76,768 by June.  Elsewhere, WalletInvestor is also expecting consistent growth for Bitcoin, reaching an average of $55, 390.70 by the end of the year. 

Of course, these predictions alone will be music to the ears of anyone who moved to buy Bitcoin in 2021, but FXStreet has gone further and outlined how BTC could realistically hit $100,000 in the near future.

Cardano

Those looking to invest in Cardano can also expect to see some impressive returns, according to most leading crypto analysts. 

TradingBeasts has ADA steadily climbing around 20% across 2021, going into December at an estimated $1.13. Whilst the value of an ADA token might not quite be as impressive as that of BTC, a return of 20% over less than 12 months would mark a pretty successful investment. 

There are also more optimistic forecasts for Cardano. WalletInvester believed that ADA could reach an average price of $1.46 by December 2021 - appreciation of approximately 50% throughout the year. 

Finally, DigitalCoinPrice is also bullish on Cardano, forecasting that the token will reach $1.78 in  2021. It also predicts that the price of ADA will decline slightly after the summer months, finishing the year at around $1.22 - which still represents growth of around 30% on prices at the time of writing. 

Cardano Vs Bitcoin: What the Experts Say

It’s fair to say that Bitcoin has received a great deal of support from mainstream investors going into 2021. Not least from Elon Musk, whose firm Tesla announced that it had acquired around $1.5bn BTC as part of its new investment strategy. 

Musk isn’t alone in his confidence in Bitcoin either. CEO of Heisenberg Capital Max Keiser is one of a chorus of voices that includes founder of Morgan Creek Digital Anthony Pompliano and investor Alistair Milne, who all believe BTC will exceed $100,000 by the end of 2021.

So what about Cardano? Well, when it comes to expert opinions, it’s fairly obvious that there isn’t really any competition between Bitcoin vs Cardano - few mainstream financial experts have ventured any bold predictions on the latter.

However, independent rating agency Weiss Ratings is optimistic about Cardano’s future, having previously tweeted that it is one of the cheapest cryptos on the market whilst also being one of the best projects in the industry. 

Similarly, Altcoin Daily host and crypto trader Austin Arnold believes the latest Goguen Mary update to Cardano’s infrastructure is as  “a big reason that the Cardano price is rising this month [February]” - and with more upgrades expected in the near future, it is possible ADA’s price still has plenty of room to grow. 

Cardano Vs Bitcoin: Conclusion

So is Bitcoin a better investment than Cardano? 

When it comes to market dominance, then Bitcoin vs Cardano really is no competition. Bitcoin has the best overall outlook of any coin on the market and at the time of writing is in the middle of a record-breaking bull market. As such, choosing to buy Bitcoin in 2021 may seem like the obvious decision. But are things really that clear cut?

There’s no telling how long Bitcoin’s price surge will last and at an all-time high of over $50,000 per token, now is a very expensive time to invest in Bitcoin. Cardano, on the other hand, is still trading at less than a dollar per token. It also has some fairly positive predictions moving further into the year. As such, choosing to buy Cardano in 2021 may well prove the better investment in terms of returns. 

When it comes to risk, there may be little difference between Cardano vs Bitcoin in 2021, however, looking further ahead then BTC is probably the safer option as despite some short-term volatility prices have generally appreciated throughout its existence.  

How to Invest in Cryptocurrency in 2021

Hopefully, our comparison of Bitcoin vs Cardano has given you a clearer picture of what you can expect from an investment into either token. But whether you choose to invest in Cordano or buy Bitcoin in 2021, you’ll need to find a trusted exchange that will give you access to the market.

There are many brokers and exchanges available online, but for most investors we recommend eToro. The broker has a powerful, yet easy to use trading platform and offers access to all the major cryptocurrencies, as well as other financial markets. 

To get started, all you need to do is open an account. The whole process can be completed in minutes and, once you’ve added a payment method, you’ll be able to start building your crypto investment portfolio. 

Bitcoin Vs Cardano - FAQ

Should I invest in Bitcoin or Cardano?

Weighing up Bitcoin vs Cardano it’s easy to assume that Bitcoin would be the way to go. However, choosing whether to invest in Bitcoin or Cardano will depend on a few factors - not least your trading goals and appetite for risk. Both tokens are expected to grow in 2021, but looking further ahead forecasts are generally more positive for Bitcoin as a longer-term investment. 

Where can I buy Cardano in 2021?

If you want to invest in Cardano - or any other cryptocurrency for that matter - you’ll need to do so via an exchange or brokerage service. We recommend eToro for most casual investors, as the platform offers plenty of analytics and trading tools without being overly complex for those new to the crypto market. 

Is Cardano better than Bitcoin?

Comparing Cardano vs Bitcoin is somewhat futile, as the cryptocurrencies were set up with different goals in mind. However, in terms of investment opportunities, it’s worth having a read through of our guide to find out which one best suits your portfolio requirements. 

Which crypto should I invest in in 2021?

If you’re planning to invest in cryptocurrency in 2021 then you have plenty of options. For those new to the market, it can be easier to invest in Bitcoin, Ethereum or Litecoin as these are some of the more well known tokens and there’s plenty of information out there. However, if you are happy to take on more risk, then there could be more growth potential in some of the lesser known altcoins. 

Where can I buy Bitcoin?

If you want to buy Bitcoin in 2021 then you’ll find plenty of exchanges and brokers to help you. One of the market leaders is eToro. If you’re looking for an easy way to get access to the cryptomarkets, then all you have to do is set up an account and you’re up and running. Aside from trading options, eToro also has plenty of information and analytical tools to help you get started. 

Cardano trading enables traders to speculate on whether the price of ADA will rise or fall in value, without the need of taking ownership of the digital asset.

Cardano (ADA) is a third-generation shared blockchain and platform that offers the ability to create and develop DApps. As the first blockchain to integrate a peer-reviewed academic approach into its major values, the network gained worldwide media coverage for its added innovation and strategy. ADA is one of the world’s top altcoins today.

Why Trade Cardano?

There are multiple benefits to trading Cardano. It helps experienced individuals in the crypto market to trade, regardless of whether or not they even own any of the cryptocurrency.

Trading is all about trying to determine whether the price of ADA will increase or decline in value.

The benefits of Cardano trading include:

1. Enhanced liquidity

2. Minimized tax costs

3. Exposure under leverage

4. Cardano volatility

5. Minimalistic trading and lower risk of inflation

6. Cardano market availability

7. The option to go long or short 

1. Enhanced liquidity

Liquidity is the indicator of how readily and efficiently Cardano, without changing the market price, can be exchanged into cash. Liquidity is critical because for technological research, it brings in improved pricing, quicker processing times, and improved precision.

As a top-tier digital asset and smart contracting DApp developer platform, ADA shows promise and a need to keep an eye on with the likes of Ethereum and Tron in the liquidity leaderboard. Currently, the value proposition of Cardano derives from its role as a research-driven smart contracting DApp site.

In comparison, the Shelly update test not only trains ADA for full decentralization, but also for crypto market supremacy. Cardano will optimize AlgoZ’s exchange algorithm and background knowledge for liquidity purposes via a new collaboration.

In general, since trades are distributed through several markets, the Cardano market is called illiquid, meaning that relatively minor transactions can pose an immense effect on market rates, causing unpredictable demands on ADA.

2. Minimized tax costs

The ability to both spread betting and CFD trading on Cardano will provide major tax advantages over virtual currency transactions. For instance, when you trade your virtual crypto for a value higher than what you initially bought it for, you’re subject to capital gains tax (CGT). However, with spread betting, as you don’t necessarily own the asset, you remove the liability of owing tax out of the equation.

On the other hand, a contract for difference (CFD) is still liable for CGT. You should, however, mitigate your losses against your CGT liability earnings, which makes CFDs valuable for hedging. Note that Cardano trading is only open to experienced traders with spread bets and CFDs.

3. Exposure under leverage

Access to high leverage is yet another bonus of selling CFDs on Cardano. Bear in mind this refers to betting on Cardano market fluctuations and not buying through traditional crypto exchanges and purchasing real crypto assets. CFDs only watch the price of Cardano and the underlying asset isn’t necessarily owned by traders who sell CFDs.

The upside to this is that traders selling ADA CFDs can benefit from both bullish and bearish markets alike. Leverage enables traders to open even greater portfolio seizes than their trading account when returning to leverage.

It is also important to note that as an investor, you should ensure that you have an adequate plan for risk control in place, which should include the appropriate barriers in place. Leverage may magnify your gains while also double your losses if not careful. However, it can play a huge effect on the bottom line of an investor, hence why we listed it as an upside to Cardano trading.

4. Cardano volatility

Even though the Cardano market is relatively new, due to large volumes of short-term trading activity, it has encountered considerable volatility. For example, Cardano is 16.39 times more volatile than DOW (Dow Jones Industrial Average). 96 percent of entire equities and investments are less volatile than Cardano and the volatility of Cardano’s historical regular returns over the last 30 days is greater than 96 percent of all global equities and portfolios relative to the total stock markets, according to Macroaxis.

5. Minimalistic trading and lower risk of inflation

Market trading for stocks involves having to provide certain credentials or warrants for the ability to actually trade. To exchange a company’s stock or shares, you must also go through a broker. Yet, buying for Cardano is simple and elegant. You simply purchase or sell ADA from exchanges and place your new assets in your wallet. Unlike the traditional way of paying for stock exchange orders, which are known to be time-consuming, Cardano transfers are usually immediate.

Cardano is also resistant to inflation, unlike other traditional currencies which are governed by centralized institutions. The blockchain technology behind ADA is limitless, and there’s no reason to think about its value losing long-term.

6. Cardano market availability

The Cardano market is commonly open for trading at your disposal 24 hours a day, seven days a week. This is thanks to no centralized market governance taking over control of market hours, unlike usual stock exchanges. On cryptocurrency exchanges worldwide, ADA transactions will occur directly between individual traders. Although the industry is transitioning to infrastructural improvements, otherwise known as ‘forks’, there may be downtimes at certain times for maintenance purposes. 

7. The option to go long or short

Cardano still has a meaning, much like the price of a stock. This way, after the market value has risen, you could make money by selling  (Shorting) your ADA coins. You call it going long when you buy ADA currency and expect the price to increase. However, when you deal with the price of Cardano, and you take advantage of prices that are both dropping and increasing in price, this is referred to as going low.

There are several exchanges where you’ll have the ability to go long or short with Cardano where at the same time, a rising or dropping pattern can be expected. You’ll still be able to go long or short on most websites where you can do margin trading.

Should I Buy or Trade Cardano?

It’s important to understand the discrepancies between buying and trading Cardano before you make a solid decision. Using CFDs will allow for assessing your profitability in investing in ADA with higher levels of risk involved. It’s crucial to take into consideration certain factors such as volatility, tax liabilities, and your decision to go long or short before stepping your foot on the gas pedal. If you want to know in detail about Cardano, take a look at this Cardano guide.

You might be interested in buying Cardano if…

• You want to take full ownership of the Cardano amount you buy

• You’re happy to pay the entire value of the asset upfront

• You don’t mind paying capital gains tax on any profits

• You don’t mind waiting for an exchange account before you can buy or sell

• You don’t mind introductory limits or maximum deposits

• It is fine for you to pay additional fees for deposits or withdrawals

• You want to earn staking rewards for holding Cardano

You might be interested in trading Cardano if…

• You want to speculate on the price of Cardano without owning it

• You want to leverage your position so that you only place a portion of the cost upfront

• You want to take advantage of the tax benefits of spread betting or CFD trading with Cardano

• You want to start trading straight away

• You don’t like maximum deposit limits

• You don’t like paying deposits or withdrawal fee