Cardano has hit a new all-time high, rising over 20% in the last 24 hours with ADA’s price peaking at US$2.55 according to CoinMarketCap. The latest crypto market rally has seen the total market cap once again push higher than US$2 trillion, and it is being led by two of Ethereum’s biggest rivals — Cardano and Solana, which have more than doubled in value over the last month alone.
Cardano is now once again the third-biggest cryptocurrency with a market cap exceeding US$80 billion, sitting just below Bitcoin and Ethereum. While Solana’s latest surge can be attributed to its entry into the NFT space and new cross-chain bridge Wormhole — ADA’s price has increased by more than 30% during the last week on speculation alone.
ADA investors continue to push Cardano’s value higher in anticipation of the Sept. 12 release of the planned “Alonzo” upgrade – a move that would usher in smart-contract functionality on the blockchain and allow Cardano to become a real player in the decentralized finance (DeFi) space.
Cardano readies for DeFi
There is little doubt that Cardano is a darling of the crypto world and ADA is one of the most highly sought cryptocurrencies for new traders, mainly for its still relatively low price and great marketing as one of the potential “Ethereum killers.”
Lately, we have witnessed the Solana blockchain’s ecosystem start to materialize with DeFi and NFTs, but despite Cardano having no real use cases as of yet, ADA’s market cap is about four times the size of Sol’s market cap of US$20 billion. Cardano has literally been rising on nothing but speculation and the promise of a great and very transparent development team. However, this is all about to change.
“We have had some investors and families allocating and staking ADA, and we’re getting more interest around it as to what it would look like in their portfolios,” said Trent Barnes, principal at ZeroCap, a digital assets firm for private clients, in an interview with Forkast.News. “Cardano’s upcoming hard fork (Alonzo) and the broader Goguen upgrade has created a lot of hype around the project. The key upgrades are the introduction of smart contracts to the network which has beaten Ethereum to the punch and makes it an attractive alternative.”
Lead Cardano developers at Input Output Hong Kong recently announced a timeline for the “Alonzo” upgrade, targeting Sept.12 for the final release date, which will usher in the smart-contract functionality.
Smart contracts allow for DeFi applications to run on networks, which has largely been the domain of the Ethereum network until this point, as has the minting of non-fungible tokens. The integration of smart contracts to Cardano will bring both functions to its mainnet for the first time. It is also slated to support an ERC-20 converter, allowing ETH tokens to run on the network.
The Alonzo upgrade could finally put the Cardano network in a real position to challenge Ethereum in the DeFi space. If speculation can drive ADA’s price to a new all-time high, then imagine what real-life DeFi transactions could do.
Coinbase spending, ADA flows in
Other positive news fueling Cardano’s price may have come from Coinshares — Europe’s largest digital assets fund manager — in its weekly digital asset fund flows report and an announcement by crypto exchange Coinbase CEO Brian Armstrong earlier today.
Armstrong tweeted today that the publicly listed exchange will soon be purchasing more than US$500 million in cryptocurrency to add to its holdings.
The Coinbase CEO wrote that the firm had “received board approval” to add more crypto assets to its balance sheet and declared that Coinbase will invest 10% of all its profits going forward.
Coinbase — the largest cryptocurrency exchange in the United States — became a publicly traded company in April via a direct listing and has reported a net income of US$1.6 billion for its second quarter earlier this month. The Wall Street Journal reported on Wednesday that Coinbase has a US$4.4 billion cash reserve to ensure continued growth in the face of potential business risks, such as regulatory crackdowns.
Armstrong also added that he hoped that Coinbase would operate more of its business in crypto, and it is likely that with the potential and growth of Cardano, ADA will be on the exchange’s list of cryptocurrencies to stockpile using its second-quarter profits.
According to Coinshares, last week saw crypto fund investors release some pressure as digital investment product outflows totaling US$22 million — with Bitcoin outflows made up the majority of the total.
Despite the continued negative sentiment and the sixth consecutive week of recorded outflows,, which comes at a time of low investor participation likely due to the seasonal effects as seen in other asset classes, Cardano ADA investment products led total inflows with US$1.3 million, highlighting a positive sentiment for the coin among professional investors.
“A lot of investors are piling on but it may be a case of “sell the news” by the time the update rolls around in early September,” Barnes said. “They also have their 2021 Cardano Summit set for late September so I’d expect a few good headlines to come out of it, project announcements and partnerships etc.”
