Is it late to invest in Cardano?

Is It Too Late To Invest?

Cardano is a blockchain platform launched by one of the co-founders of Ethereum, Charles Hoskinson, who left the project to tackle an even more ambitious project: to be the new Bitcoin.

In fact, the potential of Cardano is so great that it attracts a multitude of investors and as a result the cryptocurrency ADA is increasing at staggering rates: its value has increased by 4000% since March 2020 alone.

That means if you had invested $ 200 in Cardano in March 2020, you would now have about $ 8,000.

Does that mean it's too late to invest in Cardano?

Nothing is further from reality.

This has only just begun

To make this clear, here's an example: Imagine reading the news in April 2011 that a revolutionary digital currency called Bitcoin is making its investors rich because it has risen 4000% in the past year.

You probably would have thought it was a bubble and that it can't get much bigger.

But you would have been wrong, because in perspective, a 4000% increase in the starting price of Bitcoin was something ridiculous compared to what came later.

Take a look at this chart, the red arrow marks the point where Bitcoin was up 4000% and sparked the first "it's a bubble" comments:

If instead of discarding the investment or waiting for the price to drop (because it never happened), you had invested $ 200, do you know how much your investment would be worth 10 years later?

More than five million US dollars.

So our advice is: don't make the same mistake as the millions of people who could have become millionaires with cryptocurrencies but thought, "It's too late."

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What is Cardano?

The Cardano boom is a consequence of the revolutionary innovations it is introducing in the world of cryptocurrencies.

In fact, it is known as the "third generation cryptocurrency" after Bitcoin (first generation) and Ethereum (second generation).

These are the key contributions from Cardano:

Low transaction fees

Ethereum, Cardano's big competitor, has a ton of scalability issues.

This means that when demand is high, the network saturates, transactions slow down and, worst of all, fees skyrocket.

Cardano, on the other hand, has an infinitely scalable network thanks to its "peer-to-peer" or P2P architecture.

Does this expression sound familiar to you? It is the protocol used by file downloaders that the more users there are, the better the network will perform. And that's exactly what is happening in Cardano.

Here is an example to help you understand the big difference between Ethereum and Cardano when it comes to fees:

On February 8, 2021, two similar amounts were transferred from Ethereum and Cardano:

  • $ 177,500 million in Ethereum
  • $ 148,000 million in Cardano

However, these were the amounts for the commissions of the two:

  • $ 28.8 MILLION in Ethereum
  • $ 4,040 in Cardano.

The fees for Ethereum were about SIXTY DAILY higher than for Cardano.

Transactions with metadata

The most important cryptocurrencies are currently completely anonymous: There is no way to find out who made what transfer to whom and for what reason. There is no such thing as “metadata” in the transfer.

There is of course a positive side to this, but at the same time it enables the blockchain to be used for criminal purposes such as money laundering, online fraud and even terrorist financing.

And traditional governments or financial institutions will never adopt the blockchain without a guarantee that they can control these activities.

And this is exactly where Cardano comes in.

Transfers with Cardano remain anonymous, but if the various parties agree, metadata (information about the transfer) can be included.

The project opens the door for states and banks to use their infrastructure to offer financial and identification services to citizens.

In fact, Cardano has already made arrangements with developing countries to offer these services to their residents.

As a result, hundreds of millions of people will become users of the currency in the years to come, and since supply is limited, it will lead to an increase in its value. Therefore, those who bought on time will be able to make a lot of money.

Resistance to Quantum Computing

Quantum computing is still developing, but in a few decades it will revolutionize computing as we know it.

It would take a traditional computer, even if it was of the latest generation, millions of years to crack the cryptography that protects Bitcoin, Ethereum, and other cryptocurrencies.

However, when quantum computers become what is valued, they will have computing power infinitely greater than what we know today.

This means that in not too many years a computer might be able to crack the keys that protect the storage of our cryptocurrencies and snatch them from us, which would mean the end of cryptocurrencies, because: who would be their savings in Want to store cryptocurrencies at the risk of being looted?

Proponents of Bitcoin and Ethereum rightly argue that something like this is decades away and are downplaying it.

The Cardano project, on the other hand, is making progress and is already making great strides towards a code that is resistant to quantum computing.

Academic approach

One of the things we like most about Cardano is that it has a distinctly scientific and academic approach. It is the only cryptocurrency that uses the system known as peer review.

This means that every improvement in the Cardano ecosystem, before it is published, is sent to teams of researchers from leading universities such as Edinburgh or Tokyo who review all work, add to it if necessary, and give their approval or not.

It is not for nothing that the experts assure that the Cardano code meets quality standards that are otherwise only seen at NASA or SpaceX.

Interoperability

There are currently several hundred cryptocurrencies competing for market leadership.

Cardano made a smarter bet: harnessing the power of its network to create an "Internet of Blockchains," a common protocol that allows cryptocurrencies to communicate with one another without the need for intermediaries.

This would solve a current problem: if you are a Bitcoin owner and want to "communicate" (send money) with someone who owns Ethereum, you must first exchange your Bitcoin for Ethereum.

When Cardano achieves interoperability, this will no longer be necessary.

Fund to finance new applications

Finally, another breakthrough innovation from Cardano is its strategy for funding new application development.

The system is simple: part of the fees for each transaction is stored in a special wallet that no one has direct access to.

The developers will then submit application proposals to the Cardano community, which will vote on whether funding from the fund should be granted.

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Investment strategies

Now that you know Cardano's potential, we're going to talk about some of the basics about trading and eToro.

What is stop loss?

Certain assets haven't stopped rising yet, but that doesn't mean we should neglect risk management and stop loss is essential for that.

Stop loss is simply an order that automatically sells the asset when it drops below a certain price.

From time to time there are "crashes" on the stock exchange or in cryptocurrencies, and it is true that in the long term almost everything will be caught up again. However, if we manage to sell in a timely manner, we can buy back when the asset hits bottom and make a lot more money as it goes up.

Let's take an example: the famous Bitcoin crash in early 2018.

Imagine if you anticipated the exponential increase and bought it at $ 9,000. If you hadn't used the stop loss, you would have seen it go all the way up to almost $ 20,000 and have doubled your money ... but then you would have watched it all collapse and you would have ended up more or less at the same point where you started.

Conversely, if you had increased your stop loss when Bitcoin price skyrocketed, you could have got out before Bitcoin began to fall.

Important: You have to take into account that if you are not from the future, you will not be able to open a trade just before the surge and exit right at the peak. And anyone who tells you otherwise is deceiving you:

Successful traders spot trends, ride the wave, and drown before it hits the rocks.

A much more realistic (and immensely lucrative) operation would be something like this:

For example, suppose you bought at $ 9,000 and increased your stop loss as Bitcoin went up, always keeping it about 20% below the max price. So when Bitcoin hit $ 19,900, you set the stop loss at $ 15,500.

Therefore, when the price started falling, you would have suffered only part of the consequences and avoided the worst.

The first buy was not shortly before the rise, nor was the stop loss at its highest level, nor was the buyback at the “bottom” of the price. But even so, you would have made a lot more money with this strategy than if you had just kept the position open and waited for the Bitcoin to rally.

Do you know why?

Because by escaping the worst part of the plunge, you can use the capital you receive to buy back the asset when it shows signs of bottoming out.

So that you can better understand it, we will compare both situations:

Buy and wait

For example, if you had bought 1BTC at $ 9,000 and not set a stop loss, simply trusting that the price would rise again, your portfolio would be worth $ 60,000 today. Pretty decent performance.

Risk management

Conversely, if you had bought 1BTC at $ 9,000, sold it at $ 15,500, and reinvested all the money in Bitcoin when the price began to bottom out, you would have not 1BTC, but 1.73BTC, which is worth about $ 105,000 today.

This means that with the right risk management you would have made your portfolio almost twice as worth just once.

Without doing miracles to find perfect entry and exit points!

What is "Social Trading"?

eToro is the pioneer of “social trading”. That means that eToro has two big advantages over other regular brokers.

The first is its social network format where users are constantly sharing information, discussing and assessing the movements in the market. If you are new to stocks and crypto trading, there is a lot you can learn from the eToro community.

The second is “CopyTrading”: this innovative system allows you to automatically replicate the operations of the most experienced users with high profits.

This system is ideal for those who do not have time to manage their operations or who do not yet feel able to do so.

CopyTrading

Yes, it is as simple as it sounds: if instead of investing in Cardano directly, you want someone to manage your portfolio, all you have to do is go to the “People” tab, select a trader and click “Copy” for your account to start replicating its operations automatically.

Remember, however, that a trader's past performance is no guarantee of future returns, so it is important to always set a stop loss to maximize profits, as we explained in the previous section.

CopyPortfolio

There is a variant of CopyTrading that in our opinion is even better than copying individual investors: the CopyPortfolio.

For example, eToro CryptoPortfolio is a major cryptocurrency wallet, a more diversified way of investing in cryptocurrencies for those who don't want to put everything on one card.

Remember that you can also put a stop loss on investing in a CopyPortfolio (and that you probably should).

What is leverage?

When someone uses leverage, they borrow money from the broker so they can buy more.

For example, if the results from Apple are coming up tomorrow and you are confident that they will be great and the market will like them, then it makes sense that you open a pretty big position.

But if you only have $ 500 in your portfolio at this point, you can leverage x5 and your original $ 500 will become $ 2500 (multiplied by five) because eToro will have lent you the remaining $ 2000.

That way, if you were right and the stock goes up 10%, you will have made $ 250, while if you had only traded the original $ 500, your profit would only be $ 50. Even so, it is important not to delay your leverage operations too long as course can turn around and take your profits with it.

Attention: Just as you can make a lot more with leverage, the losses will be much higher too. We only recommend using leverage for operations where you are really sure what you are doing.

When using leverage, also remember to set a very tight stop loss to limit losses as quickly as possible if the stock or asset moves in the opposite direction than expected.

What is a short sale?

Just as you can go long, assuming that a stock will go up, you can do the opposite and make money when a stock goes down.

For example, if you have determined that a stock is grossly overvalued and you are confident that a correction is imminent, you can go short. For example, if this stock falls 10%, you have gained 10% on your original investment.

It may sound absurd at first, but to go short on an eToro asset all you have to do is click "Sell" (even if you haven't bought it before) and choose the amount. If it goes as you predicted and devalues ​​the stock, all you have to do is close your position and cash in on your profit.

Conclusions

All in all, we at CriptoAmigo are convinced that Cardano will have a huge impact on the global financial scene in a few years and that it is a good decision to invest in this cryptocurrency now that it is still relatively unknown.

And although the price tends to go up over the long term (especially with the better cryptocurrencies that are always going up), it is important to manage risk and always set a tight stop loss that will free us from corrections and us then allowed to buy back at better prices

We'll say it again: the best option to invest in Cardano from Germany is undoubtedly eToro because its commissions are very low, its interface is friendly and above all because it has amply proven itself as a reliable broker.

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* Please note that CFDs are complex instruments and, due to the leverage effect, carry a high risk of losing money quickly. 67% of retail investor accounts lose money when trading CFDs with this provider. You need to weigh up whether you understand how CFDs work and whether you can afford the risk of losing your money. Crypto assets can fluctuate greatly in price and are therefore not suitable for all investors. Trading in crypto assets is not overseen by any EU regulator. Past performance is not an indication of future results. This is not investment advice.