ADA, a cryptocurrency backed by the Cardano blockchain network, has seen its best scores in the past three years amid a large inflow of bitcoin into the altcoin market.
The ADA / USD exchange rate hit $ 0.51 after rising more than 15 percent during Friday’s Asian session. The pair’s gains were part of a broader move higher, with bids up 181 percent year-to-date and 2.908 percent since mid-March to $ 0.02.
Cardano continues his explosive move against supporting catalysts. Source: ADAUSD on TradingView.com Cardano continues its explosive move against supporting catalysts. Source: ADAUSD on TradingView.com
A larger part of the ADA bull run was based on Bitcoin. The flagship cryptocurrency rebounded sharply on the backdrop of ultra-reluctant Federal Reserve policies and over $ 3 trillion worth of stimulus packages from the U.S. Investors viewed Bitcoin as a hedge against impending inflation caused by the ongoing quantitative easing programs.
Altcoins tracked Bitcoin for most of 2020, with tokens taking the lead in the decentralized financial (DeFi) sector.
Cardano’s rise as a direct competitor to Ethereum, the second largest blockchain project by market capitalization and host to much of the DeFi protocol, helped ADA maintain its bullish bias on the pro-crypto euphoria.
Starting in 2021, the blockchain protocol will give traders more reasons to speculate on its market valuation. Here are three reasons ADA has (and may continue to do) its new record highs.
# 1 Snapping Ethereum’s hegemony
The recent intraday gains in the ADA market coincide with an upcoming upgrade to the Cardano blockchain.
IOHK, the company that represents the blockchain, announced on Thursday that it would Go through the second planned hard fork – called Mary –as part of his move from the Shelly era to the Goguen era in late February.
After completing the upgrade, Cardano supports intelligent contract development for the first time. IOHK found that their offerings would be better than Ethereum’s offerings with its blockchain services, which promises to be superior in affordability and security.
“Goguen is introducing a mechanism by which tokenization is handled natively,” the company’s blog post explained. “The logic is based more on the Cardano ledger than on smart contracts.”
“With this approach, we can implement an efficient tokenization strategy that is superior to the ERC-20 and ERC-721 standards supported on the Ethereum blockchain,” they added.
# 2 grayscale filing
The prospect that Cardano could emerge as a real competitor to Ethereum alarmed companies in the mainstream financial sector.
Grayscale Investments, a New York-based company that enables institutional investors to gain exposure to crypto assets through traditional investment vehicles, announced that it has created Cardano-enabled confidence in its range of services. The announcement was made on January 24, 2021, and the ADA / USD exchange rate has risen about 70 percent since then.
Michael Sonnenshein, CEO of Grayscale, later made it clear that adding a trust doesn’t necessarily mean offering it to customers. Still, he said the company would notice if demand for ADA or other trusts increased in the future.
# 3 ADA Perpetual Swaps Launch
Bitfinex Derivatives, the crypto derivatives wing of popular Bitfinex exchange, announced on Wednesday that Cardano and Stellar’s perpetual contracts will be closed with a maximum of 100x leverage. Traders can trade their positions in Tether’s Stablecoin USDT.
A perpetual contract allows traders to hold positions indefinitely, which makes it attractive to people who want to benefit from long-term goals. This may have partially helped ADA make new highs.