Large investors, also known as whales, seem to be snapping up Cardano's ADA token at record rates. As reported by Coindesk, the ADA balance held by wallet addresses with 1 million to 10 million coins rose to an all-time high of 12 billion ADA ($9.72 billion) last week. The increase represents a 41 percent gain since January, as per data from the blockchain analysis firm, IntoTheBlock.
The rollout of Cardano's Alonzo Smart Contracts and the success of its Decentralised Exchange, SundaeSwap, may have instilled confidence in the whales.
According to DefiLama, a site that tracks DeFi data, the total value locked (TVL) in the Cardano network increased by $50 million in a week, reaching a record high of $160.79 million. DefiLlama's data also suggest that around 70 percent of the funds are locked in SundaeSwap, supporting the theory of increasing popularity of the decentralised exchange.
Total value locked (TVL) is the overall value of crypto assets deposited in a decentralised finance (DeFi) protocol. It has become a key metric for determining interest in the DeFi sector of the crypto industry.
This has been a surprising turn of events as Cardano has been in a freefall for the last seven months. The so-called Ethereum killer was trading at an all-time high of $3.12 in September 2021, only to see a continuous downfall of more than 70 percent since then. And with a current price of $0.83, it seems like Cardano is stuck in an everlasting bear market.
Cardano touted itself as a smart contract platform but had zero smart contracts and only a handful of DeFi protocols at launch, the most prominent being the DEX SundaeSwap. But to their credit, Cardano is slowly implementing various smart contracts, such as the Alonzo update.
"Cardano appears to be showing signs of promise for more to come after years without launching smart contracts. This appears to be translating into an accumulation of ADA from large players," Lucas Outumuro, head of research at IntoTheBlock, said in a weekly report published on Friday.
"After years of lacking smart contract capabilities, Cardano is starting to show some traction in its application layer," Outmuro noted "DEXs on Cardano has raised capital from reputable crypto funds such as Three Arrows Capital".
Last week, another Cardano-based DEX, AdaSwap, announced a successful fundraising round that helped raise $2.6 million from venture capital firm iAngels and several other investors, including the famous Hollywood actress Gal Gadot.
Whale holdings have increased by over 40% this year. "Following a 70% correction, these addresses have now been accumulating aggressively. This group, as well as those holding over 100M ADA, recorded double-digit growth month over month," Outumuro added.
The accumulation of ADA by whales may indicate a potential bull run for Cardano soon. In September, before the downtrend, whales were exiting their position on Cardano with a significant sell-off, which essentially turned out to be an advance indicator of the upcoming price slide. Cardano investors might be looking at a good time ahead if the pattern follows.
Check out our in-depth Market Coverage, Business News & get real-time Stock Market Updates on CNBC-TV18. Also, Watch our channels CNBC-TV18, CNBC Awaaz and CNBC Bajar Live on-the-go!
SAD's Harsimrat Kaur declares assets worth ₹135 crore
May 14, 2024 1:18 PM
PM Modi files nomination for 3rd term from Varanasi Lok Sabha seat
May 14, 2024 10:15 AM