Why is Cardano taking the most significant punishment among the big cryptocurrencies?
Why is Cardano taking the most significant punishment among the big cryptocurrencies?
The virtual currency continues to be one of the most impacted by the sell-off in the last week in the market. The exit of eToro in the US continues to weigh, as well as inflation, uncertainty about regulation after the appearance of the main CEOs of the companies in the sector in Congress. Thus, it is far from the experts' forecasts for its year-end price of 1.73 dollars. On the other hand, Cardano has just surpassed one million wallets or wallets, staking the ADA token, distributed in more than 3,000 pools, with an activity that has reached about 33,000 million virtual coins, reaching a market capitalization of 47,000 million.
But the falls of recent days have left the capitalization level, remember, of the sixth coin in the cryptocurrency market with two million dollars below this level. And is that, although the oscillations, significantly downward, have been the general tone in the crypto world in recent days, with enormous volatility, Cardano is one of the assets that has reaped more declines. The reasons are several, some affecting everything and others of their own. Firstly, uncertainty always has a significant impact on the blockchain universe because although its multiple applications continue to evolve and improve, the market only perceives it, at least for the moment, as a high-risk asset.
We have seen Bitcoin the largest and most quoted among the big investors, with falls in these sessions on account of inflation that have dragged the rest. It seems that it is no longer considered, also at this time, as a protector of inflation, and therefore its downward trend drags the rest, especially the altcoins, very punished in recent days. Added to this is the presence of the main CEOs of the leading companies in the world of cryptocurrencies in their appearance in the US Congress. It is the first step, listening to the CEOs of Circle, FTX, Bitfury, Stellar, and Coinbase, all with a view to the future regulation of these online currencies, of which the sector, in general, does not even want to hear about, considering that it would break the libertarian and unsupported aspect of their essence.
In its share price chart, we see that Cardano continues to accumulate falls, despite its great year in the market. Declines of 5.3% in the last five trading sessions join a fateful month in which it reports falls of 35%. Also, the previous three months have seen Cardano's price declines of 46%. But after its highs of 3 dollars in September, the asset continues to treasure annual revaluations of 622%, and since December last year, these accumulated gains are close to 727%.
But it seems that investors are still punishing the stock for what is to come. This decision of eToro, in the face of future regulation, maybe an open door for other exchanges to follow, which marks the sales of investors. Recall that from December 31, users of this platform in the United States can not position on ADA in the market, with added limitations on their wallets, which will only be effective until the end of the year's first quarter. And lousy precedent, which continues to have a long way to go in the market. Negative news has led Cardano users to issue criticisms in the networks that have not pleased its creator. Since the beginning of December, Charles Hoskinson has indicated that he will block all those who complain about his cryptocurrency.
And it is curious that the activity on Cardano is increasing in the face of the falls in the stock. More wallets, but smaller amounts despite the declines we have seen in the asset's market price.
However, it seems that Cardano still stands out as one of the cryptocurrencies with the brightest future.
Whales control more than 90% of circulating ADAs.
As such, research conducted by the Finbold team using data from analytics firm Blockchain, CoinMetrics, reveals that at least a total of 31 billion ADA, valued at USD 37.8 billion at the time of publishing, would be held by 10% of the whales operating on the Cardano ecosystem. Such a figure jumps out considering that as of December 13, there are just over 33.428 billion tokens in circulation.
Digging even deeper into the data, the figures reflect that ADA's concentration in crypto whale wallets started to increase since the beginning of 2021 steadily. Thus, it is estimated that such addresses have been increasing their token supply throughout this year, this by at least about 1 billion units.
Accumulating instead of selling
About the whales in question, the reading points to the fact that these addresses would be properly dedicated to accumulating ADA, something that they have been doing throughout this year amid the constant advances that the development team has been having. Let's keep in mind that a few months ago, the network officially implemented support for smart contracts, which is expected to lead to the arrival of many use cases that take advantage of the benefits offered by its network.
One of the most anticipated announcements by Cardano enthusiasts is the arrival of DeFi platforms to its network. One of the contenders that is already taking steps in this area is SundaeSwap, which has already launched its public test network and is expected to be ready in the coming weeks for full-fledged operations.
It is precisely these expectations that reinforce the thesis behind the whales' interest in accumulating more ADA throughout 2021, as the DeFi ecosystem, in general, has been having a lot of success in different networks such as Binance Smart Chain Solana, and Avalanche.
However, other published reports suggest that the existing expectations around Cardano are also present on other projects Blockchainespecially those that pose a good scenario for sectors such as DeFi and NFTs, so the aforementioned projects, including also PolkadotThe aforementioned projects, including Cardano, seem to be the focus of interest for many investors and developers, precisely because of the possibilities they offer for the not too distant future.
Cardano underrated?
With networks like Avalanche and Solana capitalizing these days the headlines of many reports, various research agencies also highlight that Cardano could be undervalued in the face of the impact it could have in the coming years. This thesis is supported by a study published by Grayscale, which indicates that the network has a lot to offer and that it can operationally surpass what Ethereum, the network that concentrates the bulk of Blockchain activity today, currently has on its hands.
In terms of prices, although the digital currency is currently trading at about USD 1.22 at the time of publication, at the beginning of the year, its value increased by more than 590% since by January 1, the ADA token was trading at USD 0.17 per unit. On the other hand, it reached record highs of over USD 3, making it one of the best-valued assets at the time.