(Updated 16. September 2022)
Cardano is one of my "long-term holds" and an exciting crypto project. It has one of the strongest communities and the most thorough process of development I've ever seen. In this article, I'll look into the possibility of Cardano reaching one thousand dollars in the future.
Here's the short answer:
My conclusion was that a $1,000 Cardano was not realistic because it would be worth roughly twice the GDP of the USA. The only scenario I could construct required Ethereum to fail, activity to migrate to Cardano, and substantial U.S.-dollar devaluation.
When asking questions like this, we have to figure out what market capitalization Cardano would reach and compare it to familiar things like the market cap of Bitcoin, etc.
To calculate the market cap, we also have to consider the inflation rate of the circulating supply of ADA.
The current circulating supply of ADA is 32 Billion coins. The max supply is 45 Billion. I've written an article where I dive into the inflation and general tokenomics of ADA.
I'll provide a table showing you the market cap of a theoretical $1000 Cardano (ADA) depending on what year it reaches it:
| Year | Inflation Rate | Circulating Supply (ADA) | Market Cap Of $1,000 ADA |
|---|---|---|---|
| 2021 | 5.71% | 32,000,000,000 | $32.0 Trillion |
| 2022 | 4.63% | 33,825,991,912 | $33.8 Trillion |
| 2023 | 3.80% | 35,392,207,353 | $35.4 Trillion |
| 2024 | 3.14% | 36,735,603,669 | $36.7 Trillion |
| 2025 | 2.61% | 37,887,880,434 | $37.9 Trillion |
| 2026 | 2.18% | 38,876,227,452 | $38.9 Trillion |
| 2027 | 1.83% | 39,723,966,344 | $39.7 Trillion |
| 2028 | 1.54% | 40,451,100,859 | $40.5 Trillion |
| 2029 | 1.30% | 41,074,788,893 | $41.1 Trillion |
| 2030 | 1.1% | 41,609,747,357 | $41.6 Trillion |
(market cap = price * circulating supply)
The fact that Cardano would need to have a $40 Trillion market capitalization to reach $1000 makes me skeptical.
I've written about XRP reaching $1000 as well, and it faces the same problem, only even worse.
The problem that keeps cryptocurrencies like ADA and XRP from reaching $1000 is the huge supply. Coins like Bitcoin and Ethereum which have lower supply, have no problems reaching high prices.
For example, my scenario had Bitcoin moving above $1,000,000 over 10-15 years, supported by its 21-million-coin supply cap.
The chart below puts a theoretical $1,000 ADA in perspective:
I did not regard this as realistic: Cardano would have needed to grow to roughly twice the GDP of the United States.
Well, there is one way it can do it...
The Only Way Cardano Can Reach $1,000:
If Cardano is going to reach $1000 and a market cap in the tens of trillions of U.S. Dollars, it needs to be "the only blockchain". There is no room for Ethereum, Solana, Polkadot, or anyone else.
To reach $1000, Cardano needs to host all the digital bonds that banks and companies will issue on blockchains, and it needs to be the base for tokenized real estate, for DEFI, for the NFT market and Metaverses like Decentraland and The Sandbox.
If all these things go to Cardano, it might reach $1000.
The problem, however, is that basically everything is over at Ethereum's blockchain...
Even worse, projects aren't moving to Cardano when Ethereum is too slow or expensive; they move over to the Binance smart chain, Solana, Polkadot, Cosmos, or another blockchain, but not to Cardno.
Maybe sometime in the future, Cardano will be the "go-to" blockchain for Ethereum-movers. Some people think this is a realistic outcome, but I disagree.
I really don't see Cardano becoming the number one blockchain. To be that, you either need (i) The network effect working to your advantage (like Ethereum has) or (ii) The best technology and marketing there is.
Cardano does not have the network effect working in its favor, and it does not have the best technology (even though Cardano fees are 37x lower than Ethereum).
Therefore, I did not expect a $1,000 Cardano.
The Other Way Carando Can Reach $1000 (But not really...)
Cardano (ADA) can also reach one thousand bucks if the dollar is devalued drastically over the next decade, which looks like a reasonable thing to assume.
If the dollar loses 80% of its value, which is possible in the next 10-15 years, and ADA keeps its value, reaching $1000 is like reaching $200 in today's money.
So, if you think ADA can reach $200, it's kind of like saying you believe it can reach $1000 given the expected devaluing of the U.S. Dollar.
The effect of dollar devaluation is explored further in my article about inflation and money printing.
Conclusion: No, Cardano Can Not Reach $1000
My conclusion at the time was that Cardano would not reach $1,000: it would require a market capitalization roughly twice the U.S. GDP and 23.5 times Amazon's then-current market cap. The only scenario I could construct required Ethereum to fail and activity to migrate to Cardano.
That being said, you never know. This is the crypto market, after all!