In a recent post, Anders Helseth, head of research at K33 Research, asked cryptocurrency community members to stay clear of layer-1 blockchain Cardano (ADA). According to Helseth, “the Cardano network’s complete lack of meaningful activity will make the ADA token worthless over time.
Helseth based his arguments on several factors. Firstly, the analyst argued that a smart contract network like Cardano ought to have a meaningful use for its token. However, Cardano has no meaningful use or any credible track to get it, Helseth stated.
Furthermore, the analyst said there is no proof Cardano being used for anything. While acknowledging the 90,000 daily transactions on the network, Helseth said it doesn’t equate to meaningful transactions.
Explaining further, the analyst pointed at the absence of stablecoins on Cardano as a sign of a lack of activity. As noted in the report, Helseth stated that the absence of popular stablecoins such as USDT or USDC means DeFi activities are very low.
Supporting the claim, the analyst argued that Tether and Circle would have issued stablecoins on Cardano if there was considerable activity there. “The only ‘stablecoins’ that exist are 20 million of Cardano-collateralized stablecoins valued at 76 cents to the dollar, another word for nothing,” Helseth wrote.
Meanwhile, the analyst painted a bearish outlook for Cardano. In particular, he emphasized that a lack of traction means the network will gradually lose relevance and faze out. Helseth listed IOTA, NEO, and EOS as examples of networks that endured similar dilemmas.
Elaborating more on why ADA has a market cap of over $19 billion, the analyst explained that it is one of the tokens pushed to aspiring crypto investors. Helseth remarked:
Cardano also has an enticing story for newcomers, with Cardano being branded as “the peer-reviewed research-driven blockchain network”.The scientific mumbo-jumbo story will fool more people into Cardano, but the best bet is that they are growing ever fewer by the day.
Elsewhere, the analyst pointed out that price signals indicate ADA is gradually disappearing from the crypto map. In particular, Helseth stated that ADA has not rallied in line with other smart contract tokens, which he said evidences a dying coin.
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