Cardano’s ADA Token Sees Significant Surge
Recently, Cardano’s ADA token experienced a remarkable surge of 11%, surpassing both bitcoin (BTC) and ether (ETH) in performance. This uptick followed Grayscale Investments’ groundbreaking application for the first-ever spot ADA exchange-traded fund (ETF) in the United States. As a result, ADA climbed to 80 cents, with the rally commencing late Wednesday, according to data from CoinDesk. Despite this impressive gain, the ninth-largest cryptocurrency by market capitalization remains 36% lower than its peak in December, when it was valued at approximately $1.37.
Grayscale, a leading player in the crypto asset management space, has submitted a proposal to list the inaugural spot ADA fund on the New York Stock Exchange. A spot ETF would allow investors to gain exposure to ADA without the need to own the cryptocurrency directly. In the past year, spot ETFs for Bitcoin and ether have begun trading in the U.S., attracting billions in investments and reinforcing the narrative of growing institutional adoption.
It’s important to note that the U.S. Securities and Exchange Commission’s (SEC) approval of spot BTC and ETH ETFs was largely predicated on the assumption that the Chicago Mercantile Exchange’s (CME) surveillance system for bitcoin and ether futures would alleviate concerns regarding potential price manipulation. Essentially, CME futures have been a crucial requirement for obtaining approval for spot ETFs; however, the global derivatives giant has yet to introduce ADA futures.
The market’s reaction seems unfazed by this absence, as evidenced by the notable spike in ADA’s price.
Focus on Layer 1 Coins
The cryptocurrency market, particularly for Layer 1 coins like BTC, ETH, SOL, and others, appears to be well-supported in the coming days. Analytics firm Santiment has observed a notable shift in investor sentiment, moving away from memecoins and toward Layer 1 assets. “The crypto community has largely shifted their attention to Bitcoin and other Layer 1 assets like Ethereum, Solana, Toncoin, and Cardano. Collectively, the top Layer 1 assets are receiving 44.2% of discussions among specific coins. Meanwhile, top meme coins such as Dogecoin, Shiba Inu, and Pepe are becoming less prominent in social media conversations,” Santiment noted on X.
They added, “A shift in trader focus from memecoins to Bitcoin and Layer 1 assets is generally indicative of a more stable and sustainable market environment.”
Bitcoin in Stasis
Meanwhile, Bitcoin continues to trade in a subdued manner, oscillating between $95,000 and $100,000. This price range appears to be constrained by ongoing trade war concerns and rising inflation expectations in the U.S. Ether, the second-largest cryptocurrency by market capitalization, has remained trapped in the $2,500 to $2,900 range since rebounding from a significant drop to $2,000 on several exchanges last Monday. Recently, macro traders have shifted their focus to gold, pushing the precious metal’s price to all-time highs above $2,900 per ounce.
Some analysts believe that Bitcoin may ultimately emerge as a stronger contender. “The recent decrease in volatility, coupled with the rising price of gold, should underscore Bitcoin’s increasing appeal as an alternative store of value. Despite short-term fluctuations, Bitcoin’s fundamental narrative remains robust, supported by growing institutional interest and its potential role as a hedge against inflation and currency devaluation,” analysts at Bitfinex remarked.
They also noted, “A shift away from gold may be on the horizon. Over $196 billion worth of Bitcoin is currently held by ETFs, public and private companies, and even nation-states. As central banks continue to expand the money supply and the risks of fiat devaluation grow, Bitcoin’s fixed-supply narrative is becoming increasingly attractive.”
