Morningstar is an American investment research giant that helps investors put their money at the right places according to market trends and interests. Amy Arnott, who is a portfolio manager at the company has made a bold prediction about Cardano having the potential to form a big three along with Bitcoin and Ethereum and become a mainstream cryptocurrency.
Amy Arnott was in a conversation with the business insider last week where she acknowledged that there is a lot of enthusiasm about Cardano that is similar to Ethereum in terms of its working style. She also stated that both of these digital assets have a lot of potential technical applications.
She then wrote about both Ethereum and Bitcoin on her own website. Starting with Ethereum, she wrote that the extreme volatility of Ethereum rules out the interest of conventional investors despite its huge gains from the past. Moving on to Bitcoin, she seemed apprehensive about it as it doesn’t generate cash flows.
“Despite its huge gains in the past, ether’s extreme volatility will likely rule it out for many conventional investors. As with bitcoin, it’s also difficult to pin down what its underlying value should be because it doesn’t generate cash flows.”
Cardano (ADA) keeps shining
The strategist was extremely fond of Cardano’s native coin ADA as we go back to the point where she talked about it becoming a mainstream cryptocurrency. Explaining that she wrote that ADA-USD is up over 610% in year-to-date when most of the other digital assets have seen rapid sell-offs.
She said it is an asset to hold, not to sell.
Regulatory risk is a big issue
In her next point, she wrote about how institutional investors are skeptical about investing in cryptocurrencies because of uncertain regulations that make them furthermore volatile.
“Regulatory risk is a big issue – that’s been the driving factor behind a lot of the volatility over the past few months. If governments around the world clamp down on crypto in general, or bitcoin and ether specifically, that would be a large negative.”
According to her, the obvious key to the success of ADA or any other cryptocurrency is the clarity of regulatory rules. She further expressed that if crypto has to attract mainstream investors, the governments around the world have to be clear about their stance on cryptocurrencies.