Why Is Ethereum Worth About 38 Times More Than Cardano?
Cardano was built to challenge Ethereum, yet it keeps losing ground faster whenever the market turns. Understanding what separates these two blockchains reveals why closing that gap may require much more than just lower prices and ambitious promises.
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Ethereum (CRYPTO:ETH) has a market value 37.2 times that of Cardano (CRYPTO:ADA), a blockchain network created as a competitor. Ethereum has a market cap of approximately $285.2 billion, while Cardano’s is around $7.7 billion, with ETH priced at nearly $2,335 and ADA at about $0.20. This significant disparity highlights the current state of the Ethereum vs. Cardano rivalry.
Current investor sentiment isn’t helping Cardano. The Crypto Fear and Greed Index, which measures market sentiment on a scale of 0 to 100, is at 40, indicating “Fear.” Additionally, the total value of the cryptocurrency market has decreased by 0.3% in the past 24 hours.
While Cardano has shown stronger growth in certain periods, increasing by 34.0% over the last 90 days compared to Ethereum’s 24.6% increase, it has faced recent challenges. ADA has fallen 17.3% in just two weeks and trades 93.4% below its September 1, 2021 peak of $3.09. This raises the question: Is Cardano fundamentally undervalued, or is the market correctly assessing its worth?
Cardano Faces Greater Declines Than Ethereum
Market capitalization, calculated by multiplying the number of coins in circulation by their current price, places Ethereum as the second-largest cryptocurrency, with Cardano at 18th. Traders often interpret a large market cap gap as a sign of investor sentiment, with a wider gap suggesting buyers value Ethereum more for its anticipated future use.
In theory, a smaller market cap like Cardano’s could signal growth potential because it requires less new investment to raise its price. However, this hasn’t held true recently.
Over the past year, ETH fell 40.4%, while ADA fell even more, 68.1%. Over five years, ETH lost 43.2%, while ADA fell 90.3%. Each time the market turned down, Cardano lost more ground, suggesting investors view ADA as riskier.
Deeper Markets and Less Future Supply Favor Ethereum
Market cap calculations have their limitations. They value assets based on the most recent trade price, so trading activity in a thin market can drive price volatility. Trading volume better reflects market depth, with Ethereum seeing about $8.4 billion in trades in the last 24 hours compared to just $213.7 million for Cardano.
However, a significant portion of trading volume comes from automated programs known as market-making bots, which facilitate buying and selling throughout the day. Despite this, Ethereum’s deeper market allows larger investors to trade without significantly impacting the price, attracting institutional investment.
Another factor to consider is supply dilution—this occurs when new coins enter circulation. About 37.6 billion ADA are in circulation out of a maximum of 45 billion, giving a fully diluted valuation (the value if all coins were trading) of about $9.2 billion. In contrast, Ethereum’s fully diluted value matches its market cap, making Cardano more susceptible to future supply increases.
Ethereum Has ETFs and Network Effects That Cardano Lacks
Ethereum also benefits from regulatory approval. As of October 22, U.S. spot Ethereum ETFs, which are funds that hold ETH and trade similarly to stocks, collectively managed $14.6 billion in assets, with a significant $12.7 billion in net inflows. Cardano, on the other hand, lacks a similar financial instrument. Grayscale withdrew its application for a Cardano Trust ETF on August 7, and that was the only dedicated U.S. spot ADA product in progress.
Ethereum’s lead is also bolstered by network effects, meaning that as more users join the Ethereum network, its usefulness increases. Most stablecoins (tokens pegged to the U.S. dollar), DeFi applications (financial services operating on code), and tokenized funds are built on Ethereum. New projects tend to gravitate toward the more established network, further widening the usage gap.
On both networks, most transactions occur on exchanges and don’t reach the blockchain, so a quieter Cardano network may suggest buyers are accumulating ADA or hesitating to buy—on-chain data can’t clarify the situation.
Ethereum ETF Outflows and Cardano’s New Deals Could Narrow the Gap
The market gap could narrow on Ethereum’s side. On October 22, Ethereum ETFs reported a net outflow of $110.5 million, with the largest single-day outflow recently reaching $201.9 million on October 6. Cumulative inflows have decreased from $14.0 billion to $12.7 billion since September 28.
On the Cardano side, the network supported the SEC’s proposed “Regulation Crypto Assets” in a comment letter, as reported on October 21. Although this shows support, it has little immediate effect. The regulation could help ADA’s price if it simplifies launching new U.S. products—assuming a sponsor eventually steps forward to file one.
On October 21, Cardano’s founder, Charles Hoskinson, welcomed TRON (CRYPTO:TRX) to Midnight (CRYPTO:NIGHT), Cardano’s privacy-focused partner chain, with the integration expected in December. However, payments from that collaboration would benefit Midnight first and reach ADA only indirectly.
Yet, Hoskinson has faced scrutiny over a new programming language he says he is developing for Cardano, which lacks a technical specification. This has sparked skepticism in the community, making it clear that Cardano faces both challenges and opportunities ahead.
Ethereum vs. Cardano: Can ADA Narrow the Gap?
We don’t expect the significant 37.2x gap between Ethereum (ETH) and Cardano (ADA) to close much. The Fear reading of 40 suggests investors are pricing Cardano appropriately, since ADA hasn’t attracted significant new funds. For those holding ADA, the challenge is that the coin has dropped 68.1% over the past year and could continue to lag behind ETH.
For Cardano to close this gap, it would likely need a strong push. This could come from a new spot ADA exchange-traded fund (ETF) that attracts investment, or from stablecoin projects or tokenized funds choosing to use its blockchain. Unfortunately, Cardano has yet to see any of these developments.
A key price point to watch is ADA rising above $0.26, which was its value on September 25. If ADA remains around $0.20 while Ethereum’s ETF outflows stabilize, the gap could either hold steady or widen further.
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Sam Daodu is a crypto analyst and the editor of 24/7 Wall St.'s Crypto Desk, where he covers Bitcoin, XRP, Ethereum, Solana and the altcoins investors search for most. His work focuses on price levels, spot ETF flows, on-chain data and the regulatory decisions that move crypto markets, written so a first-time buyer and a seasoned trader can both use it.
Sam has written about crypto professionally since 2019 and has published more than 2,000 articles. Before joining 24/7 Wall St., he wrote for crypto media outlets and Web3 companies and ghostwrote for crypto founders and token launches. His analysis is syndicated on Yahoo Finance, MSN and AOL and has been cited by other crypto news sites. He also founded MacLabs Marketing, a content and personal branding agency for crypto founders and executives.
When he isn't reading charts, Sam is usually at the gym or watching One Piece, a series he maintains has better tokenomics than most altcoins.
