Cardano hit a new all-time high yesterday, with its price peaking at US$2.55. But this isn’t the only cryptocurrency that’s surging right now. Ethereum rivals Cardano, and Solana have more than doubled in value over the last month, and have helped lead the latest crypto rally. The total market cap has once again pushed higher than US$2 trillion.
Cardano is now the third-biggest cryptocurrency with a market cap of over US$80 billion. It’s just below Bitcoin and Ethereum. Solana’s growth is surging thanks to its new entry into the non-fungible token or NFT space and the new cross-chain bridge, Wormhole. Cardano’s price has increased by more than 30% in the last week on speculation alone.
The ADA token is showing signs of continuing to rise in anticipation of its planned Sept. 12 “Alonzo” upgrade, which would bring with it smart-contract functionality and allow ADA to become a real player in the decentralized finance (DeFi) space.
Cardano Going DeFi
Cardano is a highly sought-after and popular cryptocurrency. Its low price, coupled with its potential for large returns, has made it a darling of the crypto world. It also has great marketing: some speculate that it could be the “Ethereum Killer” in the future.
We have seen the Solana blockchain ecosystem start to take shape. With the rise of DeFi and NFTs, it is clear that Cardano has a lot of potential. Yet, despite ADA’s impressive global market cap of four times that of Sol, ADA does not seem to have any real-life use cases as of yet. This is all about to change, as the Cardano development team has already started to release a roadmap for ADA’s future.
“The demand for ADA is really high,” said Trent Barnes, principal at ZeroCap. “We have had some investors and families allocating and staking ADA, and people are starting to ask what it would look like in their portfolios.
Input Output Hong Kong’s lead Cardano developers recently announced the timeline for “Alonzo” – targeting Sept. 12th as the final release date. This upgrade will make Cardano capable of smart contracts, and they claim this will be a major step towards mainstream adoption.
A smart contract is an agreement between two or more people that is automatically executed without any third-party involvement. DeFi applications running on Cardano’s network for the first time will make it easier to maintain ownership of NFTs. The platform will be implementing an ERC-20 converter too. This means ETH tokens will be able to run in Cardano’s network.
The Alonzo upgrade for the Cardano network could finally put it in a place to rival Ethereum when it comes to decentralized applications. If speculation drives the price of ADA to new highs, imagine what real-life decentralized finance transactions could do.
Coinbase ADA Investments
Another good reason for Cardano’s price going up today is the announcement by Coinbase CEO Brian Armstrong earlier today. Coinshares, Europe’s largest digital assets fund manager, released a weekly report of the flow of digital assets in their fund this week and it seems to be a trend that’s also contributing to Cardano’s rise.
Recently, Coinbase has received board approval to buy US$500 million in cryptocurrency. For Coinbase, this will mean that 10% of all future profits will go towards buying crypto assets. Coinbase CEO Brian Armstrong tweeted today about the decision, which he says is a “major step forward in expanding cryptocurrency investment opportunities”.
Coinbase, the largest cryptocurrency exchange in the United States, became a publicly-traded company recently and reported a net income of US$1.6 billion for its second quarter. They have US$4.4 billion to make sure that they can continue to meet customer needs and business regulations, despite any regulatory crackdowns.
Armstrong said that he hoped Coinbase would use more crypto in its business, and it is likely that with the potential of Cardano and its growth, ADA will be on the exchange’s list of coins to buy.
Crypto funds took a dive last week, with investors withdrawing a total of US$22 million. Bitcoin was the majority of the total, with $18 million in withdrawals. A majority of this amount was in Bitcoin, though other currencies like Ethereum also saw significant outflows.
Despite six weeks of record outflows and declining sentiment, Cardano investment products still led total inflows last week with US$1.3 million from professional investors. So it’s not all doom and gloom for the coin, especially because this money came at a time when investors’ participation is low.
“There’s a lot of hype about Cardano right now, but it might be ‘sell the news’ by next month. However, they’re also set to release their 2021 Cardano Summit in late September, so there are plenty of good headlines on the horizon. There will be project announcements, partnerships, and more,” Barnes said.