Your guide to trading Cardano (ADA)

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Why is Cardano important to traders?

Launched in September 2017, Cardano is an ambitious blockchain project founded by Charles Hoskinson, the former co-founder of Ethereum and BitShares. In the project’s own words, it was created to “provide a more balanced and sustainable ecosystem” for cryptocurrencies.

If you are looking to invest in Cardano, it is important to note that it represents far more than merely a cryptocurrency. Although ADA coin might be the public face of the project, Cardano’s aspirations are far beyond creating a functional currency. Cardano is, first and foremost, a technological platform, aiming to employ breakthroughs and innovations of the blockchain “to build accessible financial services for all.

This innovative project is intended to combine the transactional ease of Bitcoin with Ethereum’s smart contract system and support for decentralised applications, also known as dApps. It employs a meticulous peer-review system, reaching out to programmers, scientists and academic institutions to help improve its open-source blockchain. It states that its own cryptocurrency ADA is the only coin that uses a ”scientific philosophy and research-driven approach.” 

Besides, Cardano is taking its innovations to the next level by employing ”third-generation” blockchain technology in order to improve many of the “old-fashioned” fundamentals. The protocol is stated to feature a layered blockchain software stack that is flexible, scalable, and is being developed using the most thorough academic and commercial software standards in the industry.

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You can trade Cardano (ADA) CFDs on Capital.com 24/7.

How to invest in Cardano (ADA) CFDs

An individual has two options when investing in the cryptocurrency market. Firstly, they can buy actual cryptocurrencies, such as purchasing Cardano on an exchange like Bittrex, CoinEx or Binance, so they own the ADA themselves. This is considered a long-term investment, as the individual is waiting for the price to rise significantly, so they can later sell their Cardano ADA coins for a profit.

Alternatively, they can trade a contract for difference (CFD) on a particular cryptocurrency, and speculate on the price difference. A CFD is a type of contract, typically between a broker and an investor, where one party agrees to pay the other the difference in the value of a security, between the opening and closing of the trade.

Investing in Cardano CFDs gives you the opportunity to trade ADA in both directions. Regardless of having a positive or negative view of the ADA market forecasts and predictions, you can try to profit from both upward or downward future price movement.

You can either hold a long position, speculating that the ADA price will rise, or a short position, speculating that the price will fall. This is considered a short-term investment as CFDs are used within shorter timeframes.

For instance, to trade ADA CFDs, you can speculate on the ADA/BTC pairing.

Trade Cardano to Bitcoin - ADA/BTC CFD

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There are pivotal differences between buying a cryptocurrency and trading a CFD in a crypto market. When buying cryptocurrency, it is stored in a wallet, but when trading CFDs, the product is stored in your account, which is regulated by a financial authority. You are more liquid when you purchase CFDs as you are not tied to the asset, you have merely purchased the underlying contract.

Looking for a reliable CFD trading provider to invest in Cardano? If so, just spend 3 minutes of your time to sign up and start your journey of ADA trading with Capital.com. Try our award-winning trading platform or download our mobile app, which will become your smart CFD trading assistant.

What is ADA coin? What is cryptocurrency?

Although some may use the terms ”Cardano” and ”ADA” interchangeably, there is an important difference to understand. Whilst Cardano references the entire platform and ecosystem, ADA is the native cryptocurrency of this network. The currency is integrated natively into Cardano’s settlement layer, making it an essential part of the platform. It is the first third-generation cryptocurrency, aiming to solve problems related to scalability, interoperability, and sustainability in the cryptocurrency ecosystem.

A cryptocurrency is a digital asset conceived for use as a medium of exchange, which uses cryptography to secure transactions, control the supply of additional units, and corroborate transfers. In short, cryptocurrency is a decentralised electronic currency.

Cryptocurrency is stored in a ‘wallet’, which can take various forms. For instance, ADA coins can be stored in an online wallet, or alternatively in an offline electronic wallet, and it can even be stored physically in hardware.

Why trade Cardano CFDs with Capital.com

Advanced AI technology at its core: a Facebook-like news feed provides users with personalised and unique content depending on their preferences. If a trader makes decisions based on biases, the innovative news feed offers a range of materials to put him or her back on the right track. The neural network analyses in-app behaviour and recommends videos, articles, news to help polish your investment strategy. This will help you to refine your approach when trading Cardano crypto.

Trading on margin: providing trading on margin (up to 1:2 for cryptocurrencies) with the help of CFDs, Capital.com gives you access to the cryptocurrency market even with a limited amount of funds in your account.

Trading the difference: when trading an ADA CFD, you do not buy the underlying asset itself, meaning you are not tied to it. You only speculate on the rise or fall of the ADA coin price. CFD trading is nothing different from traditional trading in terms of strategies. A CFD investor can go short or long, set stop and limit losses and apply trading scenarios that align with his or her objectives.

All-round trading analysis: the browser-based platform allows traders to shape their own market analysis and forecasts with sleek technical indicators. Capital.com provides live market updates and various chart formats, available on desktop, iOS, and Android.

Focus on safety: Captal.com puts a special emphasis on safety. Licensed by the FCA and CySEC, it complies with all regulations and ensures that its clients’ data security comes first. The company allows to withdraw money 24/7 and keeps traders’ funds across segregated bank accounts.

History of Cardano

Introduced on September 29, 2017, Cardano was co-founded by Jeremy Wood and Charles Hoskinson. To help get funds for the development of the project, the team raised approximately $63m during its ICO.

Cardano cryptocurrency made a surprising entry into the market: over the first week from launch, ADA experienced dramatic growth, skyrocketing in value and achieving a market capitalisation of over $600m by October 1, 2017. It quickly got listed on most of the top cryptocurrency exchanges. On November 29, 2017, ADA surged over 142.41%, boosting its market cap to $3.5b. In early January 2018, the value of Cardano crypto reached an all-time high of $1.162, peaking at a market capitalisation of over $33b.

Cardano crypto

In regard to Cardano price history, just like any other cryptocurrency it has had a chaotic growth trajectory. ADA opened for trading in October 2017, at a price of $0.025. During the same day, it dropped at its all-time low of $0.017354. However, within just 3 months, ADA had seen a rapidly increasing interest from international crypto enthusiasts, hitting its record high at $1.162 on January 4, 2018. That represents a growth of over 45 times – rather impressive considering cryptocurrency standards.

In the first quarter of 2018, Cardano crypto (ADA) experienced a crash, dropping to $0.13 in March. In 2019, after hitting a $0.37 mark in May, the ADA coin has entered a bullish trend, trading in the range of $0.0308  – $0.1 throughout the rest of the year.

FAQ section:

Before buying Cardano, you will need a place to store it. This is what a wallet is for, and it consists of two elements: a private key and a public address. A wallet requires a private key, specific to the individual, that enables access to the Cardano address stored in the wallet, which is also the public key. The wallet is what enables Cardano, or any cryptocurrency, to be a secure medium of exchange. Essentially, people can send Cardano, to certain wallets using the public key, which only the individual can access with their private key. Some individuals choose to keep their coins in their wallet provided by their cryptocurrency exchange, due to the fact that a lot of exchanges have mobile apps that allow people to easily buy, sell and spend cryptocurrencies.

Cryptocurrency exchanges or online wallets are far from immune to the dangers of cybertheft. The infamous case of the Mt Gox Bitcoin exchange highlights this. Historically, Mt Gox was the largest global exchange for Bitcoin, until it declared bankruptcy in 2014 after its security had been compromised. Mt Gox had 850,000 Bitcoins, valued at $450m in February 2014, before their exchange was emptied by hackers. It is believed that the private keys of Mt Gox’s digital wallet were stolen from as early as 2011. These risks are avoided when trading Cardano CFDs because you do not need a wallet.

A ‘bubble’, in market terminology, is where the price of an asset far exceeds its intrinsic value. For instance, the dot-com bubble that occurred between 1995 and 2001, is a prime example, where information technology industry firms saw their stocks rise, merely because of the market sentiment around that particular industry, irrespective of their profits or chances of succeeding. This market then crashed in March 2000.

The problem here is that it is hard to determine the value of the cryptocurrency to begin with. Although a lot of investors are holding cryptocurrencies as if they were equities, they are not. Yet, they do not particularly act like currencies either, which makes comparisons to currency valuations difficult.  However, with any new technology, caution is advised. It could well be the case that the valuations of Bitcoin or Cardano are not overvalued, and that the bubble, if there is one, is represented by the various new cryptocurrencies that are being driven by market sentiment. Arguably, this is comparable to the dot-com instance, where stocks like Amazon were not overvalued, but others (like Pets.com, which went from IPO to liquidation in 268 days) clearly were. So, it seems that only time will tell whether the market is overheating, but in either case, there are options to trade using CFDs to take both long and short positions.

From late 2017 to early 2018, there was a surge in the price of Bitcoin (reaching $20,000 per Bitcoin), followed shortly behind by other cryptocurrencies. The market then crashed between January and February 2018, and Bitcoin fell free, dropping 65% in value. Consequently, most other cryptocurrencies crashed as well. So, there clearly was a bubble in the crypto market. The question that this implies is whether there is another one on the verge. The value in most cryptocurrencies is derived from their potential; how they could be used to advance society in the future. Without institutional acceptance however, the potential value, will remain merely potential, but whether this implies that cryptocurrencies are overvalued is another question.


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