Is it better to buy something that's in demand because it mostly stays the same or something that might be in demand because it's theoretically able to continuously change in response to conditions?
That's one rough distinction between Bitcoin (BTC 0.38%), crypto's tried-and-tested asset, and Cardano (ADA 0.99%), one of the bigger smart contract assets. Let's evaluate which one is more deserving of a $3,000 investment.
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Bitcoin's core features will probably never be obsolete
Bitcoin aims to be a store of value independent of anyone's ability to issue more of it. To accomplish that end, its protocol commits to a fixed supply curve and then refuses to negotiate with anyone about it; there will never be more than 21 million coins, and it keeps getting harder to mine over time.
Since its most recent halving in April 2024, only roughly 450 new Bitcoins are produced per day. That increases the odds that future demand for the asset will bump into a limited quantity of supply, forcing buyers to bid higher prices.
Even if there's slightly less demand for it in the future than there is now -- which isn't guaranteed at all -- the price will still be experiencing upward pressure over the long run, more or less indefinitely. And that dynamic will likely remain true regardless of market, economic, or political conditions.
CRYPTO: BTC
Key Data Points
Plus, one convenience factor worth knowing is that if you want exposure to Bitcoin without dealing with setting up a crypto wallet, you can just buy shares of a Bitcoin ETF in your retirement or brokerage account.
Cardano still has to prove itself
Cardano has a handful of different capabilities, but generally, it's a smart contract-capable blockchain. Its transaction costs make it cheaper to use for money transfer purposes in comparison to Bitcoin, and it's also a bit faster, but neither of those traits has led to it gaining a significant amount of traction in any particular vertical.
A smart contract platform typically needs developers, users, and real economic activity to be considered valuable. But Cardano's decentralized finance (DeFi) footprint, as measured by the total value locked (TVL), is just $124 million, and there are only around $37 million in stablecoins on its chain. And the chain only collected $407 for itself in revenue on Feb. 12.
CRYPTO: ADA
Key Data Points
The takeaway is that the network simply isn't being used very much at all. So there aren't really the conditions in place for the coin to consistently be in demand and gain in value. Technically, Cardano's developer team can and probably will add new features to try to attract new users and more capital. But it doesn't currently have any kind of product-market fit.
And that's why Bitcoin is by far the better option when it comes to where to invest your $3,000; it's already in demand, and it won't need to change all that much for that to continue to be true.
