Cardano’s ada token rallied today, building upon yesterday’s price increases to attain its highest value in six weeks.
The digital asset reached $1.19 this afternoon, CoinDesk data reveals.
At that point, the cryptocurrency was trading at the most since February 10, marking a six-week high, additional CoinDesk figures show.
The digital currency has retraced slightly since then, but it has managed to retain most of its recent gains, trading at roughly $1.15 at the time of this writing.
[Ed note: Investing in cryptocoins or tokens is highly speculative and the market is largely unregulated. Anyone considering it should be prepared to lose their entire investment.]
Several analysts weighed in on this latest upside, identifying various developments they interpreted as driving these price movements.
Martha Reyes, head of research at digital asset prime brokerage and exchange Bequant, spoke to this matter, emphasizing how ada has risen along with the broader cryptocurrency market.
“Cardano has been recovering some lost ground recently but hasn’t fully clawed back from YTD underperformance vs the ecosystem,” she stated.
“It has been driven in part by the overall resilience of the digital assets market despite the tightening cycle being priced in by the fixed income market.”
Reyes also mentioned the recent revelation that Grayscale planned to include ada in its Grayscale® Smart Contract Platform Ex-Ethereum Fund, as well as optimistic statements made by technologist and entrepreneur Charles Hoskinson.
“There have also been specific catalysts including the launch of Grayscale’s Smart Contract Platform ex-Ethereum fund and bullish comments from Charles Hoskinson, the father of Cardano, on the 2022 outlook for the blockchain,” she noted.
“He has declared that we will get similar performances to Solana and the like this year as they turn on new features in June and October.”
Armando Aguilar, an independent cryptocurrency analyst, also commented on the implications of the Grayscale fund announcement.
“ADA as a PoS cryptocurrency has a secured network where people commit their ADA holdings to the network,” he noted.
“The more ADA committed, the higher level of security/transaction validation there is on the cardano blockchain.”
“These people benefit by receiving rewards (a share of newly minted ADA tokens). Now users can passively earn ~3.75% by staking their ADA tokens,” Aguilar emphasized.
He noted that the single largest component in Grayscale’s new fund is the ada token, and as a result, “millions in new capital can flow into the new Grayscale trust.”
Aguilar also mentioned Coinbase, which recently started offering staking services for the ada token, as potentially driving demand for the digital asset.
“Coinbase and Grayscale provide institutional services and with the rise in demand for DeFi and higher traditional yields, institutional capital could be accessing ADA via Coinbase and Grayscale products, thus pushing the price of the cryptocurrency higher,” he stated.
Andrew Rossow, an internet and technology attorney, also weighed in on this exchange’s decision to offer ada staking services.
When asked what variables drove the cryptocurrency’s recent gains, he stated “I definitely think Coinbase is a factor here, as there aren’t many platforms that provide that tailored user experience and support.”
In spite of these positive developments, Reyes warned that Cardano has been struggling to keep up with its competition.
“It has become a show me story as the coin has tumbled down the market cap league tables and has been a weak performer versus ethereum in the last year as traders bet on that blockchain’s migration to proof of stake,” she stated.
“In conclusion, it is at risk of getting left behind if the upgrades don’t come soon but sentiment was so downbeat that a better market and some specific positive news pushed up the price.”
“June will be key to see if more Dapps launch on Cardano after the hard fork,” Reyes emphasized.
Disclosure: I own some bitcoin, bitcoin cash, litecoin, ether, EOS and sol.