Why Cardano $ADA most likely will never be worth $100

The Cardano platform’s cryptocurrency $ADA is, at the time of writing this article, worth approximately 3000 satoshi or 56 cent. Wild price predictions are circulating on the forums and the Cardano reddit, ranging from a few US dollars to a whopping $1000 per ADA in five years time and even though a lot may happen in five years, a price of $1000 or even $100 is not very likely to happen.

Before you count me out as someone that have missed out on the last weeks’ rapid increase in value of Cardano and are just jealous, I want to let you know that I am deeply passionate about this project and personally invested in $ADA a while ago and want the very best for it. I also believe that Cardano deserves far more attention than it currently gets among cryptocurrency enthusiasts. The company developing Cardano, Input Output Hongkong (IOHK) is on the path to create a third generation cryptocurrency that has the opportunity to become something quite good for the cryptocurrency community as a whole in addition to the investors and early adopters. If they stick to the roadmap It is definitely possible to reach the price of a few USD in 2018 and perhaps even more in the following years.

Now that I have an alibi, let me explain why I believe it will be close to impossible to reach a price of $100 per ADA. Stay with me now, this will get a little mathy. The current circulating supply is, according to coinmarketcap about 26 billion coins (31 billion total supply), with the max supply being set to 45 billion. The current price sets the market capitalization to roughly $15 billion. Now let's examine what $100/ada in five years time would mean. We are uncertain at the moment on how fast the supply of ADA will increase and when it will reach the max supply of 45 billion. For the sake of this example let’s say the supply will have increased to 35 billion in five years time. Then if the price is $100, the market cap would be 35 * 10^9 * 100 = 3.5 * 10^12 or $3.5 trillion. It is definitely hard to grasp a number of that magnitude so let’s compare it to a few things. $3.5 trillion is slightly less than the GDP of Germany (according to The World Bank). $3.5 trillion is also 19% of the US GDP, 5% of the Gross world product (the entire world’s combined GDP, which is $75 trillion) and coincidentally also 5% of the current market cap of all stock exchanges combined ($69 trillion).

Unless $ADA is the one (the coin that revolutionizes the way people use and see money, all over the world) a valuation this high is thus very unlikely, to say the least. Cardano is still a wonderful project that will influence the cryptocurrency world in a very positive way and $ADA will still increase a lot in value over the coming years, but I do believe that a healthy dose of criticism is good for any project such and this and spreading ridiculously high valuations does not help Cardano at all. So continue talking and learning about Cardano and other spectacular projects out there, but be rational and, as always, do not believe everything you read!

Have a good one
//Oaklundt