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Cardano’s ADA Token Surges as Fresh Buyers Jump In

The coming launch of smart contracts into the network is providing a boost, one research firm said.

Aug 27, 2021 at 5:50 p.m. UTC
Updated Aug 27, 2021 at 7:47 p.m. UTC

Cardano’s ADA token surged Friday, pushing the gains this month to 112%, as the price fast approaches its all-time high.

ADA was trading at $2.84 at press time, up 12% over the past 24 hours, according to data from Messari.

The number of wallet addresses holding the asset for fewer than 30 days has increased by 10%, compared with last month, possibly a sign that fresh buyers are coming in, according to data from crypto research firm IntoTheBlock.

“With the imminent launch of Cardano’s smart contracts, ADA is experiencing a boost in short-term interest,” IntoTheBlock wrote Friday in a tweet.

Chart of addresses holding Cardano's ADA token for less than a month suggests fresh buying interest. (IntoTheBlock)

Cardano’s long-awaited smart contracts feature is set to go live on Sept. 12.

“For this upside to continue, capital needs to come from somewhere,” said Denis Vinokourov, head of research at Synergia Capital.

“What I am asking is what ecosystem will capital leave to enter Cardano? Or is it going to be ‘new capital’? Who will suffer because of Cardano’s revival?” said Vinokourov. He noted that a lot of capital has gone into solona, polygon and, more recently, avalanche.

“The likes of bitcoin cash (BCH) and EOS will likely continue to underperform,” Vinokourov said. “These two behemoths are from the same era, but Cardano has managed to continue to innovate.” The chart for long-term holders – “hodlers” in crypto-speak – shows the significant growth seen in the last two months.

Chart of addresses holding Cardano's ADA token for more than a year suggest "hodlers" have been slower to grow. (IntoTheBlock)

However, the number of hodlers hasn’t increased as quickly as the number of mid- and short-term traders, as seen in the chart below.

That is because ADA is probably a more “momentum-driven short-term play than a long-term high-conviction one,” said Lucas Outumuro, IntoTheBlock’s head of research,.

So-called "cruisers" who have held the ADA token for more than a month but less than a year represent the fastest-growing segment of holders in recent months. (IntoTheBlock)


DISCLOSURE

The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.

Lyllah Ledesma is a reporter on CoinDesk's Markets team.

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