Cardano hard fork: What does Alonzo mean for ADA?
The Cardano hard fork was a big deal, but how does Alonzo affect a price prediction?
- What is Cardano?
- Allons-y, Alonzo hard fork
- Smart contract functionality
- ADA price history over the past four months
- Cardano price prediction
Cardano’s Alonzo hard fork has now been put in place. What impact has it had on the coin’s price, and how has it affected any cardano (ADA) price prediction?
Before we check its price, here is a quick refresher about cardano.
What is Cardano?
Cardano is a blockchain and its native currency is known as ADA. You will sometimes hear Cardano being used to describe the coin, and while that is not strictly accurate, it is enough to know that when we talk about an ADA price prediction, we are talking about a cardano price prediction.
The Cardano blockchain was launched by Ethereum co-founder Charles Hoskinson in 2017, who likes to point out how much of what it does is based on academic research, with reports presented in peer-reviewed papers and journals. The Cardano blockchain is part of the world of decentralised finance (DeFi), which aims to allow people who do not have a bank account to gain access to financial services, and allows people to send money across borders without paying commission.
As for its ADA token or coin, this was named after 19th century computer pioneer Ada Lovelace. The coin allows holders to vote on how the Cardano blockchain is run, as well as giving them the ability to delegate their voting rights.
ADA can be traded and bought on a range of exchanges, as well as being used as a form of payment for the people who manage the blockchain. The coin is mined using the proof-of-stake method with an algorithm called Ouroboros.
Allons-y, Alonzo hard fork
Earlier this year, Input Output Hong Kong (IOHK), the company behind Cardano, announced it would be making upgrades to the system. The most notable of these was the Alonzo upgrade, which would serve as an ADA hard fork.
A hard fork is a process where a blockchain makes all the transactions it had previously considered valid to be invalid and all the transactions it had previously considered invalid to be valid. It is, in effect, a permanent, unchangeable modification on the blockchain.
When a hard fork is established, users have to download and install an updated version of the software. The previous version of the blockchain still exists, which means there is also the potential for a new cryptocurrency. This is what makes it different to a soft fork, which changes the protocol and effectively erases the original version.
Hard forks can be initiated as a way to counteract bugs, stop hackers stealing crypto, or simply as a way to make the network more efficient. They can be somewhat controversial, though – for instance, miners will have to change the way they work in order to get hold of the crypto. Also, people who hold the coin that is being hard-forked might not want to have the newer version.
Smart contract functionality
One of the key features of the Alonzo hard fork was that it would see full smart contract functionality on the blockchain. Smart contracts are computer programs that automatically execute as soon as certain conditions are met. They are often seen as a crucial part of blockchain technology and transactions, although the Cardano blockchain had not really supported them previously, or at least not on the public blockchain.
Tim Harrison, marketing and communications director at IOHK, writing in a blog post on the release date of Sunday, 12 September, described the hard fork as “an epochal moment in the birth of a new ecosystem".
He added: “It’s only just the beginning. But this is still a moment for celebration. As a community, we have been on an incredible journey together. Rightly, we should allow ourselves to acknowledge the tremendous efforts made by so many to get here. This will also be a time for reflection on the challenges we've collectively overcome.”
Harrison said people needed to temper their expectations for the Cardano hard fork, pointing out that it took two years for the first DApp (decentralised application) on the Ethereum blockchain to gain any traction: “There are high expectations resting on this upgrade. Some unreasonably so. Cardano watchers may be expecting a sophisticated ecosystem of consumer-ready DApps available immediately after the upgrade. Expectations need to be managed here.”
What is going to happen next? Before we take a look at that, we will need to have a look at what has happened to the ADA coin over the past few months leading to the ADA hard-fork release.
ADA price history over the past four months
ADA hit an all-time high on 16 May when it stood at $2.46. However, storm clouds were on the horizon when the great crypto day crash of 19 May saw it nearly halved from its intraday high of $2.03 to an intraday low of $1.03. While there was some recovery with it closing the day at $1.48, it seemed the damage had been done.
The ADA coin price stayed below the $2 mark until the middle of August. The coin then had an intraday low of $1.68 on 12 August, but the next day it hit an intraday high of $2.15 and closed up at $2.14. It hit $2.25 on 14 August, and while it dipped below $2 on 17 August, it was back above $2 on 18 August, closing at $2.11.
The market remained bullish, and the next day it reached an intraday high of $2.45, just one cent away from its record high of 16 May. That high was broken on 20 August, when it peaked at $2.58 before closing at $2.46. The price kept moving upwards, with a close of $2.71 on 22 August and a close of $2.92 the following day. It looked like this was it for the growth, with it closing at $2.54 on 26 August, but the day after that its intraday high and close matched at $2.94. It then began looking like a case of when, rather than if, cardano would break the $3 barrier – which it did on 2 September, with the ADA price hitting an intraday and all-time high of $3.10.
Ultimately, though, it couldn’t sustain that high level. The price fell back to an intraday low of $2.04 on 7 September, and the announcement that the ADA hard fork had been completed on 12 September didn’t have that much of an impact. At the start of the day, it was trading at $2.64; it reached an intraday high of $2.78 before dropping to a low of $2.51 and closing on $2.58. It went down a bit further, and by the afternoon of 14 September, it was trading at $2.34. It certainly appears that the post-ADA hard-fork price of cardano is going down, at least in the short term.
Finally, let us take a look at cardano price predictions. Will the cardano hard fork have an ongoing positive impact? Remember, we are now looking at the ADA hard-fork price prediction, so the stakes may be higher.
Cardano price prediction
Among prominent crypto prediction sites, WalletInvestor has said ADA should reach $4.74 in 12 months. Its cardano price prediction for five years is currently $13.976 – up from 18 August, when it forecast $3.928 in a year’s time and $11.01 in five years’ time.
Likewise, DigitalCoinPrice’s ADA price prediction is increasingly upbeat, now seeing it close the year at around $3.21. Considering it said in August that the coin would reach $2.63 by the end of the year, this is an encouraging progression.
The same site says ADA will be worth $4.37 in a year’s time, $5.12 in two years’ time and $5.41 in three years’ time. The cardano price prediction for September 2025 is $6.35, and it should get to $7.87 a year later, the site claims. It predicts an ADA price of $9.38 in September 2027 and $11.36 in September 2027.
Finally, gov.capital is a bit more bearish, at least in the short term. The site says it is possible the coin could drop to as low as $2.19 at the end of the year, but it should be about $3.29 on 14 September next year. The same day in 2023 could see it stand around $4.51, and it should be around $6.13 a year after that. It could reach about $7.93 on 14 September 2025, and if the site’s predictions are accurate, it will be worth around $10.03 a year from then.
Cardano: Buy or sell?
This is a difficult question to answer. Whether you should buy it or sell it depends on how sustainable you think the recent all-time highs can be.
If you think it can improve on them sooner rather than later, then it might be a buy. However, if you think it’s at a point where the price is likely to go down, then it could well be a sell. You will have to do your own research and make the decision for yourself.
Will cardano go up?
It might do. The long-term forecasts seem to be optimistic. Nevertheless, we do have to point out that price predictions are very often wrong.
You must remember that cryptocurrencies can be extremely volatile, that prices can go down as well as up, and that you should never invest more money than you can afford to lose.