Instructions for acquiring Cardano in Canada

Many crypto investors are looking to altcoins other than bitcoin and ethereum as a hedge against the market's continued volatility since the 2021 crash (from which it has yet to fully recover as of October).

Although the fad has increased interest in so-called "altcoins" as a means of gaining crypto exposure without being subject to wild price swings, it has been especially beneficial to cardano. After years of relative obscurity, this digital coin has emerged as the third largest cryptocurrency, behind bitcoin and ethereum. As the world becomes more aware of the environmental impact of crypto, its meteoric rise has been fueled in part by blockchain enthusiasts looking for more climate-friendly options.

To what extent is cardano worth investing in, and what is it? Take a look at this for the essential details:

Cardano: What Is It?

Cardano (ADA) is the native cryptocurrency of the open-source Swiss blockchain platform Cardano (CARD). In 2015, ethereum co-founder Charles Hoskinson helped create the cardano project, which was released the following year. The purpose of the open-source platform is to facilitate the development and execution of smart contracts and other forms of decentralized protocol.

As one investment advisor puts it, "you can think of cardano as the third generation in the evolution of blockchain technology, with bitcoin representing the first generation and ethereum representing the second generation." located Mandeville Private Client Inc

Proof-of-stake (POS) blockchains are used by a small handful of cryptocurrencies, but Cardano is the largest one. Competing with ethereum and, to a lesser extent, bitcoin, it promises a more secure and efficient network.  

According to Zagari, Cardano is aimed at addressing the problems of scalability, interoperability, and sustainability that have plagued bitcoin and ethereum so far.

Proof-of-work (POW) consensus algorithms, like those used by Bitcoin and Ethereum, consume huge amounts of energy. Contrarily, Cardano employs a novel proof-of-stake consensus mechanism dubbed Ouroboros.

Validating a transaction using proof-of-work (POW), as in the case of Ethereum, requires solving a puzzle, which is laborious and resource-intensive. Instead, the number of coins held by a miner is used to verify a Cardano transaction at the point of sale.

As Zagari puts it, the POS protocol is "much more environmentally friendly, low on energy usage, and faster than its competitors to process transactions" because it is built to minimize energy expenditure by doing away with complex computation and intense power consumption.

Unlike ether, Cardano's ADA has a different monetary policy. The availability of ADA is restricted, unlike ether. While the supply of bitcoin is limited to 21 million, the supply of ADA is capped at 45 billion, with 32 billion coins already in circulation, as reported by CoinMarketCap. com

In addition, the Alonzo Hard Fork upgrade coming to cardano in the near future will greatly increase its utility. According to Zagari, "Alonzo will allow cardano to become a major player in the decentralized finance (DeFi) space by incorporating smart contract functionality, facilitating automated cryptocurrency lending and trading."

Ethereum currently controls the US$100 billion DeFi market, but cardano promises to improve upon this.

To put it simply, smart contracts are legally binding computer code that can be found on the blockchain and automatically carry out the terms they contain. They can be implemented to facilitate the automated execution of a contract and are used to verify and record transactions without the need for a third party.

In his opinion, Zagari says, "this long-awaited Alonzo Hard Fork upgrade will bring forth a surge of interest and have developers strongly consider building their DeFi applications on the network." In theory, this would be a good thing for ADA and would increase its value.

Is Cardano a Reliable Investment in 2021/22?

After a terrifying crash in May 2021, which saw $1 trillion in crypto valuations wiped out, the broader crypto market has since recovered. When compared to its larger competitors, ADA's recovery was one of the quickest and it has now far surpassed its May peak while still trading below its all-time highs.

Increases in ADA year-to-date have been even more striking. The worth of the digital currency was zero U.S. dollars. The price was only $17 at the end of 2020, but by September of 2021, it had soared to over $3. With a market cap of $1.2, Litecoin is the third largest cryptocurrency. With a market capitalization of US billion as of September Though its market cap as of January 11, 2021, is only about a tenth of that of crypto heavyweights ether and bitcoin, ADA has clocked a staggering 1,450% return for the year to date, according to data from Coinbase.

According to Nigel Green, CEO and Founder of deVere Group, the largest independent financial advisory firm in the world, Cardano's full decentralization earlier this year has fueled its appeal and price, better positioning it to compete with rivals bitcoin and ethereum in the booming cryptocurrency market.

Cardano has "matured" by going fully decentralized, which means that the company behind it has given up control of the network's blockchain to its users. According to Green, "it's only a matter of time before it begins to draw more investors, which will naturally drive up its price."

This isn't to say that investors shouldn't pay attention to standard investment caveats. According to Zagari, "Cardano is a promising investment for investors who are able to buy and hold for several years and who are also able to apply an ad hoc buying style."

When prices drop suddenly, usually by 5-10%, investors can take advantage of the situation by making ad hoc investments. When compared to dollar-cost averaging, where purchases are made at set intervals and in set amounts, this method is manual.

"Investors could see favorable results if they combine a buy-and-hold approach with a buy-the-dip mindset," Zagari says.

To further complicate matters, diversification is also essential. Investors in digital assets would do well to remember that diversification is one of the keys to financial success. "These investors will want to diversify their cryptocurrencies," says Green, "which means cardano is ultimately likely to eat into bitcoin's market share."  

Cardano's potential can't be denied due to its durability, low cost, and increasing number of use cases. Investors seeking a bitcoin-like ride with asymmetric and outsized returns uncorrelated with traditional markets may find it particularly appealing.

There has been a noticeable increase in the number of users from all walks of life interested in virtual currency. Individual and institutional investors alike are beginning to see its merits as a portfolio strategy. To further strengthen cardano prices in the long run, Green argues that "baby boomers and Gen X, who own most of the world's wealth, are embracing the cryptocurrency revolution."

The hyper growth of the cryptocurrency market, Zagari warns, comes with extreme volatility. Because that's how animals are He recommends considering cardano for your portfolio "if you do not need to access these funds for at least five years."

How much of your portfolio you are willing to keep immovable or illiquid for a few years is a key consideration when deciding how much to invest in cardano. Generally speaking, Zagari advises that the percentage not exceed 10% of the total value of an investor's portfolio.   

Making a CAD Cardano purchase.

Cardano, and other cryptocurrencies, can be purchased through either a brokerage platform or a cryptocurrency exchange. Investors in Canada looking to get some cardano exposure have a few options. CoinSmart*, Newton, Wealthsimple, NDAX, and others are some of Canada's domestic crypto exchanges that allow users to buy and sell a variety of cryptocurrencies, including ADA, in Canadian dollars.

Crypto.com, Binance, and Kraken are just a few of the exchanges based outside of Canada that permit purchases of cryptocurrencies with a wide variety of fiat currencies, including CAD.

According to Zagari, "Canadian investors cannot hold cardano inside their TFSA, RRSP, or non-registered investment accounts." Using an exchange is the most convenient and secure way to buy, store, and exchange one cryptocurrency for another. ”

Cardano can be kept in a local wallet, either digital or physical. Even so, some traders favor putting their digital coins in cold storage, an offline vault where only you have access to the private keys, for an extra layer of security.

Before deciding to buy cardano, you should familiarize yourself with the dangers of cryptocurrency ownership and carefully weigh the benefits of a potential investment against the possibility of a loss.

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