In this article on our series of articles exploring UNIT vs. USD charts, we dive into Cardano. Cardano was one of the first layer-1 projects to feel the excitement of this 2020–2021 bull run. With the promise of an entire ecosystem of dApps, Cardano set its valuation as high as 30B UNIT, taking a significant portion of the total ~557B UNIT.
When comparing the UNIT and USD charts for ADA, we noticed a significant difference. ADA could not reach a new top in UNIT while tripling the previous USD top from 2018. This difference is significant because it shows that while in USD, ADA could exceed its previous range, in UNIT, it couldn’t.
The range difference is a sign of how UNIT can serve as a long-term measuring unit of value while USD is bound to continue its loss of value. We have seen this behavior in many cryptocurrencies, not only ADA. Therefore, we prefer UNIT to measure real value inside the crypto space over USD.
Once a coin obtains considerable importance in the crypto space, the value in UNIT is directly related to the movement of that importance since UNIT measures the absolute value of each coin within the cryptocurrency space.
However, the USD value is unable to capture this and instead follows the policy of the Federal Reserve Bank, which makes the USD very fragile in the long term. Therefore, the cryptocurrency space needs UNIT to measure value without trust.
UNIT also provides an extra advantage over using a specific cryptocurrency to measure value. When using a cryptocurrency like Bitcoin as a benchmark, one relies on the peculiarities of the code and community of that specific coin. However, because UNIT aggregates several of the top cryptocurrencies, the risk of using a skew ruler to measure disappears, and we get the true value.
Figure 2 uses a log scale. While log scale is necessary to view USD charts due to USD’s exponential devaluation, UNIT charts can be viewed in linear scale (Figure 1). This is because UNIT provides stable value measurement in the cryptocurrency space.
In the two charts (Figure 1 and Figure 2), we included the Fibonacci retracements and extensions tool to show the difference in price range and how UNIT respects Fibonacci levels. For example, the price range in UNIT of ADA was limited to exactly 10x, while the price range in USD is over 100x.
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